TCR_Public/040813.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, August 13, 2004, Vol. 8, No. 170

                           Headlines

AAIPHARMA: CIMA LABS Sues to Recover $26 Mil. Plus Break-up Fee
ABRAXAS PETROLEUM: Reports a Net Profit in 2nd Quarter 2004
ACTUANT CORP: 95.7% of 13% Sr. Sub. Debtholders Tender Notes
ADELPHIA BUSINESS: Metromedia Holds Allowed $20MM Rejection Claim
AIR CANADA: Court Enjoins WestJet from Misusing Confidential Info

AIRGATE PCS: Stockholders' Deficit Narrows to $89MM at June 30
AMERICAN SEAFOODS: Extends 10-1/8% Senior Debt Offer to Aug. 17
AMERIPATH INC: Reports $2.1 Million of Net Income in 2nd Quarter
ARTEMIS INTERNATIONAL: Emancipation Discloses 13.3% Equity Stake
ASTROPOWER: Files Plan and Disclosure Statement in Delaware

BEAR STEARNS: Fitch Affirms Low-B Ratings on 2 Certificate Classes
C-BASS CBO: S&P Gives BB Rating to $15 Million Class E Notes
COLLINS & AIKMAN: Moody's Assigns B3 Rating to $400 Million Notes
COMMUNITY GENERAL: Moody's Upgrades Debt Rating to Ba2 from Ba3
COOPERHEAT-MQS: Team Inc. Completes $35 Million Asset Purchase

COVANTA ENERGY: Covanta Tampa Plan Declared Effective on Aug. 6
CROWN HOLDINGS: Prices EUR350 Million 6.25% Senior Secured Notes
CWMBS INC: Fitch Junks Two Series 1999-13 Certificate Classes
DAYTON SUPERIOR: Schedules Q2'04 Earnings Release on Aug. 18
DII/KBR: AMS Objects to Halliburton Securities Fraud Settlement

E*TRADE: Fitch Junks Preference Shares and Composite Securities
ELANTIC TELECOM: Wants More Time to Assume or Reject Leases
ELANTIC TELECOM: Gets Nod to Use Cash Collateral Through Aug. 18
ENDLESS ENERGY: Closes Plan of Arrangement & Gets $16.6M Financing
ENRON CORPORATION: Appaloosa & Angelo Gordon Appealing 16 Orders

FAIRCHILD SEMI: Further Reduces Bank Debt Interest Expense
FLEMING COMPANIES: Asks to Court to Approve Massara Settlement
FREESTAR TECHNOLOGY: Terminates TransAxis Stock Purchase Agreement
FREESTAR TECHNOLOGY: Terminates Unipay Asset Purchase Agreement
FUN-4-ALL: Creditors Committee Taps Douglas J. Pick as Counsel

GENTEK INC: Trust Asks Court to Approve Mediation Procedures
GLOBAL CROSSING: Settles with U.S. Labor Dept. on Retirement Plan
HANGER ORTHOPEDIC: Earnings Falloff Prompts S&P's Low-B Ratings
KAISER: Exploring Options After No Qualified Bids on QAL Interest
KAISER ALUMINUM: Wants to Reject Structure Computer Service Pact

INSIGHT HEALTH: Opens New Columbus Diagnostic Imaging Center
INTERSTATE BAKERIES: Lenders Approve Credit Facility Amendment
INTERSTATE BAKERIES: Private Convertible Placement Raises $100MM
INTERSTATE OPERATING: Moody's Rates $75M Loan & $60M Revolver B2
KMART HOLDING: Joining the Nasdaq-100 Index Beginning August 19

LANCE Trust: Fitch Upgrades $27.5 Notes to BB & $23M Notes to B+
LIQUIDMETAL TECH: Expects to Complete Audits by September 30
LOUDEYE: Plans to Acquire On Demand Distribution in Stock Swap
MARCHFIRST: ConnectMail Sale May Fetch Up to $2 Million Over Time
MARINER HEALTH: Faces Probe Over Death Of Texas Facility Resident

MIRANT CORPORATION: Asks Court to Approve TransCanada Compromise
ML CBO: Moody's Places Caa1-Rated Notes on Watch & May Downgrade
NATIONAL CENTURY: Liberty National & Aprahamian Feud over Sale
NATIONAL INDUSTRIAL: Case Summary & Largest Unsecured Creditors
NEXPAK CORPORATION: Employs Logan & Company as Claims Agent

NEXPAK CORP: Gets Okay to Draw $8 Mill. on DIP Financing Facility
ORANGE COUNTY: Moody's Downgrades Housing Bond Rating to Ba1
OWENS CORNING: Plans to Produce Laminated Shingles in Illinois
PARMALAT GROUP: Milk Products Bids Should be in by September 1
PEGASUS SATELLITE: Has Until November 1 to Decide on Leases

PJK INC: Case Summary & 3 Largest Unsecured Creditors
PNC MORTGAGE: Fitch Affirms Low B-Rating on 2 Certificate Classes
PRIMUS KNOWLEDGE: Inks Approx. $30MM All-Stock Deal with ATG
QWEST COMMS: Offers to Buy $750 Million of 7.20% Notes for Cash
QWEST COMMS: Subsidiary Offering $500 Mil. of New Debt Securities

QWEST CORPORATION: Fitch Rates New $500M Unsecured Notes at BB
QWEST CORPORATION: S&P Assigns BB Rating to New $500 Million Notes
QWEST CORP: Moody's Gives New $500M Sr. Unsecured Notes Ba3 Rating
RENT-WAY: 401(k) Retirement Savings Plan Hires Malin Bergquist
SIGHT RESOURCE: Transfers Kent Optical Assets to CadleRock

SK GLOBAL AMERICA: Court Sets Plan Voting Deadlines
SMITH SAND: Case Summary & 20 Largest Unsecured Creditors
SOLUTIA: Subsidiary Plans to Install Deep-Dye Coloring Line in Va.
STERLING GROUP: Taps Amisano Hanson as Independent Accountants
SURE FIT: Completes 100% Asset Sale to D.E. Shaw Affiliate

THE LOMA COMPANY: Case Summary & 5 Largest Unsecured Creditors
TITANIUM METALS: Sets Aug. 19 Record Date for 5-for-1 Stock Split
VALCOM INC: Sells 6 of 20 Sound Stages to Pay $8.5 Million Debt
VANGUARD HEALTH: S&P Junks $560M Notes and Rates $1.05B Credit B
VANGUARD HEALTH: Moody's Junks Notes & Rates Credit Facilities B2

VOEGELE MECHANICAL: Engages Phoenix Management as Consultants
UNITED AIR: Machinists' Union Sues Officers Over Pension Funding
W.R. GRACE: Revises Alternative Dispute Resolution Program
WORLDGATE COMMUNICATIONS: Complete $7.55 Million Private Placement
XEROX CORP: Board Declares $1.5625 Preferred Stock Dividends

XO COMMUNICATIONS: Amalgamated Gadget Discloses 9.4% Equity Stake

* BOOK REVIEW: Entrepreneurship: Back to Basics

                           *********

AAIPHARMA: CIMA LABS Sues to Recover $26 Mil. Plus Break-up Fee
---------------------------------------------------------------
CIMA LABS INC. (NASDAQ: CIMA) filed a lawsuit in Hennepin
County District Court, State of Minnesota, against aaiPharma Inc.
(NASDAQ: AAII) for fraud and breach of contract relating to
the merger agreement entered into by the two companies on
August 5, 2003.

Pursuant to the merger agreement, in order to accept what was
considered a superior offer from Cephalon, Inc., CIMA paid a
termination fee of $11,500,000 to aaiPharma in November 2003.  In
a press release dated March 1, 2004, aaiPharma announced that its
Board of Directors had become aware of unusual sales in certain of
its product lines, that it had appointed an independent committee
to investigate these matters, and that the results of the
investigation could have a material adverse effect on aaiPharma's
financial performance.  In June 2004, aaiPharma filed with the
Securities and Exchange Commission its Form 10-K for the year
ended December 31, 2003, its amended Form 10-K for the year ended
December 31, 2002, and amended Forms 10-Q for the three quarters
of 2003.  The amended filings included restated financial
information.

CIMA is seeking recovery of the $11,500,000 termination fee paid
to aaiPharma, as well as fees and expenses in excess of $5,000,000
incurred related to the analysis and negotiation of the merger
agreement with aaiPharma.

Steven B. Ratoff, Chairman of the Board and interim CEO of CIMA,
commented, "Had aaiPharma's financial results as restated been
public, we would not have entered into a merger agreement with the
company.  Under the circumstances, we believe it is appropriate to
seek recovery of the break-up fee and recoup the significant fees
and expenses we incurred in connection with negotiating the
transaction."

As reported in the Troubled Company Reporter's Aug. 11, 2004
edition, Athlon Pharmaceuticals, Inc., amended its $36 million
counterclaim against aaiPharma, Inc. to include a claim for fraud.

In that claim, Athlon alleges that aaiPharma misrepresented its
contingent and other liabilities by failing to disclose that it
had placed excessive quantities of Darvocet N100 and other
aaiPharma products into the distribution channels during 2003.  It
was this type of "channel stuffing" activity, among other issues,
that caused aaiPharma recently to restate its earnings.  In
connection with its tort claim, Athlon also seeks punitive
damages.

Athlon has also filed a separate lawsuit against aaiPharma for
breach of the parties' Asset Purchase Agreement pursuant to which
aaiPharma purchased an analgesic compound currently marketed under
the name Darvocet A500.  In that suit, Athlon seeks damages for
non-payment of royalties, an accounting and attorney's fees in
addition to other relief.

                    About Athlon Pharmaceuticals

Athlon Pharmaceuticals -- http://www.athlonpharm.com/-- is a
specialty branded pharmaceutical company that focuses its business
strategies on under-promoted products in the areas of pain
management and respiratory illnesses.  Established in 2001, Athlon
Pharmaceuticals is a privately held entity with a presence in over
25 states.  The company continues to seek new business
opportunities through licensing, development and acquisitions.

                         About CIMA LABS

CIMA develops and manufactures prescription and over-the-counter
products based upon its proprietary, orally disintegrating drug
delivery technologies, OraSolv(R) and DuraSolv(R).  Based on its
technologies, an active drug ingredient, which the Company
frequently taste-masks, is formulated into a new, orally
disintegrating dosage form that dissolves quickly in the mouth
without chewing or the need for water.  The Company develops and
manufactures orally disintegrating versions of drugs for
pharmaceutical company partners for which CIMA currently produces
four branded prescription pharmaceuticals and four over-the-
counter brands.  CIMA also is developing proprietary products
utilizing its orally disintegrating technologies, as well as its
new OraVescent(R) enhanced absorption, transmucosal drug delivery
system.  Further information about CIMA is available at
http://www.cimalabs.com/

                       About aaiPharma Inc.

aaiPharma Inc. is a science-based pharmaceutical Company focused
on pain management, with corporate headquarters in Wilmington,
North Carolina.  With more than 24 years of drug development
expertise, the Company is focused on developing, acquiring, and
marketing branded medicines in its targeted therapeutic areas.
aaiPharma's development efforts are focused on developing
improved medicines from established molecules through its
significant research and development capabilities.

                         *     *     *

As reported in the Troubled Company Reporter's on April 29, 2004,
Standard & Poor's Ratings Services affirmed its 'CCC' corporate
credit and 'CC' subordinated debt ratings on aaiPharma Inc.
At the same time, Standard & Poor's removed the ratings on the
Wilmington, North Carolina-based specialty pharmaceutical
company from CreditWatch.

The outlook on aaiPharma is negative.

"The low speculative-grade ratings reflect the company's
improved but still limited liquidity given the lack of visibility
of aaiPharma's profitability and cash flow generation," said
Standard & Poor's credit analyst Arthur Wong.

For more information on the Company, including its product
development organization AAI Development Services, visit
aaiPharma's website at http://www.aaipharma.com/


ABRAXAS PETROLEUM: Reports a Net Profit in 2nd Quarter 2004
-----------------------------------------------------------
Abraxas Petroleum Corporation (AMEX:ABP) reported financial and
operating results for the second quarter of 2004.  The Company
announced production for the second quarter of 2004 of 24.5
million cubic feet equivalents (MMcfe) per day, up 35% from Q2
2003 production of 18.1 MMcfe per day and a sequential production
increase of 4% over Q1 2004.  The production increase for the
quarter marked the fourth consecutive quarter in which the Company
has increased production.  The Company posted a net profit in Q2
2004 of $372,000 compared to a loss of $2.3 million in Q2 2003.

The most significant items related to Q2 2004 results included:

   -- Natural gas production increased 38% from Q2 2003 due to
      continuing development activities;

   -- Revenues increased 46% from Q2 2003 due to production
      increase and higher price realizations;

   -- Profitability achieved despite impact to LOE and G&A from
      non-recurring items and financing costs expensed in Q2;

   -- Non-cash stock based compensation expense recovery of $2.3
      million in Q2 2004;

   -- Capital expenditures of only $2.9 million for Q2 due to
      indenture constraints; and

   -- EBITDA of $6.6 million, an increase of 33% from Q2 2003.

The Company also announced its updated hedge positions, which
include a series of price floors for approximately 40% of its
projected production through January 2005.  These floors,
comprised of a combination of oil and natural gas contracts over
these months, provide an average floor of approximately $24.33 per
barrel for the oil contracts and $4.33 per Mcf for the natural gas
contracts.  These instruments do not restrict the Company from
receiving prices above these floor levels.

Abraxas' CEO, Bob Watson, commented, "The quarter just ended marks
the fourth consecutive quarter in which we have posted a
production increase.  We think this fact testifies to the quality
of our assets especially considering the limitations on us
regarding how much capital we can spend on development.  The
inability to achieve a consent from our bondholders to provide
relief from this restriction, at a cost that made sense to all of
our stakeholders, has not deterred us from working on strategies
that will allow us to accelerate development of our projects.
Strong production increases and continuing high price realizations
contributed to our bottom line profit for the quarter and allowed
us to generate significant cash flow above our capex needs that
was utilized to pay down debt."

                       About the Company

Abraxas Petroleum Corporation is a San Antonio-based crude oil
and natural gas exploitation and production company.  The Company
operates in Texas, Wyoming and western Canada.

At March 31, 2004, Abraxas Petroleum Corporation's balance sheet
showed a $75,828,000 total stockholders' deficit, compared to a
deficit of $72,203,000 at December 31, 2003.


ACTUANT CORP: 95.7% of 13% Sr. Sub. Debtholders Tender Notes
------------------------------------------------------------
Actuant Corporation has completed its previously announced cash
tender offer and consent solicitation for its 13% Senior
Subordinated Notes due 2009 (CUSIP No. 00508WAB2).  The tender
offer and consent solicitation expired at 5:00 p.m. New York City
time, on August 10, 2004.

Actuant received valid tenders and consents from holders of
$27,974,000 aggregate principal amount of Notes representing
approximately 95.7% of the outstanding principal amount, all of
which have been accepted for payment by the Company.  Accordingly,
Actuant and the trustee under the indenture have executed and
delivered a supplemental indenture containing the amendments
described in the Offer to Purchase and Consent Solicitation
Statement dated July 1, 2004, as supplemented and amended.

Total consideration to be paid for each $1,000 principal amount of
Notes validly tendered on or before the Expiration time will be
$1,252.14, plus accrued interest up to, but not including, the
payment date.  The total consideration includes a consent payment
of $30 per $1,000 principal amount of the Notes.

The cash tender offer and consent solicitation of the Notes will
result in a net-of-tax special charge of approximately $6.4
million in the fourth quarter of fiscal 2004, representing the
combination of the consideration paid above principal value for
the Notes, costs paid for the early termination of interest rate
swaps hedged against the Notes, transaction expenses, and the non-
cash write-off of a portion of capitalized debt discount and
issuance costs.  The Company will report its operating results for
the quarter ended August 31, 2004 on Thursday, September 30, 2004.

Goldman, Sachs & Co. acted as the exclusive Dealer Manager for the
tender offer and consent solicitation.

Actuant (NYSE:ATU), headquartered in Milwaukee, Wisconsin, is a
diversified industrial company with operations in over 20
countries.  The Actuant businesses are market leaders in highly
engineered position and motion control systems and branded
hydraulic and electrical tools. Products are offered under such
established brand names as Dresco, Enerpac, Gardner Bender, Kopp,
Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and
Power Gear.

                         *     *     *

As reported in the Troubled Company Reporter's May 5, 2004
edition, Standard & Poor's Ratings Services assigned its 'BB'
rating to the $250 million senior revolving credit facility of
Actuant Corp. (BB/Stable/--).  Proceeds from the credit facility,
maturing Feb. 19, 2009, were used to refinance the company's
existing secured revolving credit facility.


ADELPHIA BUSINESS: Metromedia Holds Allowed $20MM Rejection Claim
-----------------------------------------------------------------
TelCove, Inc., formerly known as Adelphia Business Solutions,
Inc., and Metromedia Fiber Network Services, Inc., are parties to
certain purchase orders in which ABIZ leased fiber from
Metromedia in certain long haul segments and fiber optic rings in
various markets throughout the country.  A dispute arose between
ABIZ and Metromedia as to the amount owing to Metromedia pursuant
to the Fiber Optic Agreement.

Upon the parties' agreement, ABIZ rejected the Fiber Optic
Agreement and paid $218,498 to Metromedia in satisfaction of the
postpetition amounts owed.  Metromedia filed Claim No. 1727
asserting $62,243,658 in rejection damages with respect to the
Fiber Optic Agreement.

To finally resolve all Metromedia claims against the Reorganized
ABIZ Debtors arising under the Fiber Optic Agreement, the parties
stipulate that Metromedia will have a $20,000,000 allowed, general
unsecured claim to be treated in accordance with provisions of the
ABIZ Plan, which will represent the full and final settlement with
regard to all amounts owed by the Reorganized ABIZ Debtors to
Metromedia.  The parties execute mutual releases.

Metromedia will also withdraw all claims filed against the ACOM
Debtors on account of the Fiber Optic Agreement.

Judge Gerber of the U.S. Bankruptcy Court for the Southern
District of New York approves the Stipulation.

Headquartered in Coudersport, Pennsylvania, Adelphia Business
Solutions, Inc., now known as TelCove --  http://www.telcove.com/
-- is a leading provider of facilities-based integrated
communications services to businesses, governmental customers,
educational end users and other communications services providers
throughout the United States.  The Company filed for Chapter 11
protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-
11389) and emerged under a chapter 11 plan on April 7, 2004.
Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $2,126,334,000 in assets and $1,654,343,000 in debts.
(Adelphia Bankruptcy News, Issue No. 65; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


AIR CANADA: Court Enjoins WestJet from Misusing Confidential Info
-----------------------------------------------------------------
The CCAA Court grants Air Canada's request for injunction.
The Court requires WestJet to collect and preserve relevant
records, and prohibits the rival airline from misusing
confidential information.

                     WestJet CEO Apologizes

WestJet Airlines, Ltd., Chief Executive Officer Clive Beddoe
apologized for Mark Hill, the former WestJet executive who was
accused of corporate espionage, Dow Jones Newswires reports.
"Neither I nor the board condone this activity," Mr. Beddoe told a
Dow Jones reporter.

In a press release announcing WestJet's second quarter results,
Mr. Beddoe indicated that any material loss arising from Air
Canada's allegations is unlikely, and that any potential damages
suffered by Air Canada or potential benefits gained by WestJet
based on the allegations would not be material to WestJet.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971).  Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel.  When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue
No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AIRGATE PCS: Stockholders' Deficit Narrows to $89MM at June 30
--------------------------------------------------------------
AirGate PCS, Inc., (Nasdaq:PCSA), a PCS Affiliate of Sprint,
reported financial and operating results for its third fiscal
quarter and nine months ended June 30, 2004.  Highlights of the
quarter include the following:

   -- Net income for the quarter was $2.2 million, or $0.18 per
      share, compared with a loss of ($8.2) million, or ($1.59)
      per share in the third fiscal quarter of 2003;

   -- EBITDA, earnings before interest, taxes, depreciation and
      amortization, was $20.2 million compared with $14.1 million
      in the third fiscal quarter of 2003;

   -- Gross additions were 38,223 compared with 38,919 in the
      third fiscal quarter of 2003;

   -- Churn decreased to 2.55% in the third fiscal quarter of 2004
      from 2.90% in the third fiscal quarter of 2003 and 2.92% in
      the second fiscal quarter of 2004;

   -- Net additions were 7,434 compared with 5,593 in the third
      fiscal quarter of 2003; and

   -- Cash and cash equivalents increased to $62.0 million as of
      June 30, 2004 from $48.6 million at March 31, 2004 and from
      $30.8 million at June 30, 2003.

                     Management Commentary

"We are very pleased to report the third quarter of fiscal 2004
represented the first quarter of achieving positive income from
continuing operations in AirGate's history," said Thomas M.
Dougherty, president and chief executive officer of AirGate PCS.
"In addition, we also reported EBITDA in excess of $20 million,
marking the sixth consecutive quarter for double-digit EBITDA for
AirGate.  These strong results provide the Company with a solid
foundation to build upon as we continue our transition to pursuing
a more aggressive growth-oriented strategy.

"During the third quarter, we realized significant improvements in
our churn rate with a 37 basis point sequential improvement," Mr.
Dougherty continued.  "We attribute this improvement in churn to
favorable seasonable trends which tend to result in lower
involuntary churn and to initiatives we implemented during the
quarter to address voluntary churn and improve prime customer
retention."

"Revenues have been strong as subscriber service revenues have
held steady with the increased penetration of subscribers using
data services," Mr. Dougherty continued.  "Also, as has
traditionally been the case during our third fiscal quarter, we
realized significant growth in inbound roaming minutes as non-
AirGate wireless users traveled to vacation destinations within
our footprint.  Our roaming revenues increased for the quarter
year over year despite a drop in the roaming rate with Sprint of
nearly 30% to $0.041 per minute."

"On the operating expense side, our operating costs per subscriber
improved over the same period last year with lower Sprint service
bureau fees and lower bad debt expense due to improvements in the
quality of our subscriber base,"  Mr. Dougherty continued. "In
addition, we experienced only modest increases in network
operating costs despite a nearly 30% increase in network minutes
of use.  Furthermore, we have carefully managed our investment in
sales and marketing as we prepare to more aggressively expand our
distribution capabilities."

"We continued to focus on strengthening our balance sheet with
cash and cash equivalents increasing to $62.0 million as of June
30, 2004, compared with $48.6 million in the prior quarter," Mr.
Dougherty continued.  "During the quarter, we paid down $3.3
million of principal on our credit facility reducing the
outstanding amount to $134.5 million.  By virtually any measure,
we had a great quarter accentuated with our first profitable
quarter from continuing operations."

                        About AirGate PCS

AirGate PCS, Inc., is the PCS Affiliate of Sprint with the right
to sell wireless mobility communications network products and
services under the Sprint brand in territories within three states
located in the Southeastern United States.  The territories
include over 7.4 million residents in key markets such as
Charleston, Columbia, and Greenville-Spartanburg, South Carolina;
Augusta and Savannah, Georgia; and Asheville, Wilmington and the
Outer Banks of North Carolina.

At June 30, 2004, AirGate PCS, Inc.'s balance sheet showed a
$89,148,000 stockholders' deficit, compared to a $376,997,000
deficit at September 30, 2003.


AMERICAN SEAFOODS: Extends 10-1/8% Senior Debt Offer to Aug. 17
---------------------------------------------------------------
As part of American Seafoods Group LLC and American Seafoods
Finance, Inc.'s previously announced tender offer and consent
solicitation for their outstanding 10-1/8% Senior Subordinated
Notes due 2010, they are extending the tender offer expiration
date.  The tender offer, which had been set to expire this week
will be extended to 5:00 p.m., New York City time, on Tuesday,
August 17, 2004, unless extended by American Seafoods.

The closing of the initial public offering and the other financing
transactions contemplated by the registration statement on Form
S-1 (Registration No. 333-105499) is a condition precedent to the
consummation of the tender offer.  On August 5, 2004, American
Seafoods filed Amendment No. 10 to its registration statement on
Form S-1 with the Securities and Exchange Commission.

The consent expiration date was 5:00 p.m., New York City time, on
September 26, 2003.  Holders who desired to receive the consent
payment and the tender offer consideration must have both validly
consented to the proposed amendments and validly tendered their
Notes pursuant to the offer on or prior to the consent expiration
date.  Holders who validly tender their Notes after the consent
expiration date will receive the tender offer consideration, which
is $1,170.00 per $1,000 principal amount of Notes, but not the
consent payment.  As of the close of business on September 26,
2003, which was the consent expiration date and the last day on
which validly tendered Notes could have been withdrawn, American
Seafoods had received the requisite consents to the proposed
amendments to the Indenture governing the Notes.  Consequently,
the proposed amendments were incorporated in the Third
Supplemental Indenture, which was executed and delivered on
September 26, 2003, by and among American Seafoods Group LLC,
American Seafoods Finance, Inc., the guarantors listed on Schedule
A thereto and Wells Fargo Bank, National Association, as trustee.
The proposed amendments to the Indenture, which will not become
operative unless and until the Notes are accepted for purchase by
American Seafoods, will eliminate substantially all of the
restrictive covenants, certain repurchase rights and certain
events of default and related provisions contained in such
indenture.

As of August 10, 2004, all of the Company's existing senior
subordinated notes had been validly and irrevocably tendered.

Consummation of the offer is subject to certain conditions,
including consummation of certain financing transactions
contemplated by the registration statement on Form S-1 filed with
the Securities and Exchange Commission by American Seafoods
Corporation.  Subject to applicable law, American Seafoods Group
LLC and American Seafoods Finance, Inc. may, in their sole
discretion, waive or amend any condition to the offer or
solicitation, or extend, terminate or otherwise amend the offer or
solicitation.

Credit Suisse First Boston, or CSFB, is the dealer manager for the
offer and the solicitation agent for the solicitation.  MacKenzie
Partners, Inc. is the information agent and Wells Fargo Bank,
National Association is the depositary in connection with the
offer and solicitation.  The offer and solicitation are being made
pursuant to the Offer to Purchase and Consent Solicitation
Statement, dated September 15, 2003, and the related Consent and
Letter of Transmittal, each as modified by American Seafoods'
press release, dated September 24, 2003, which collectively set
forth the complete terms of the offer and solicitation.  Copies of
the Offer to Purchase and Consent Solicitation Statement and
related documents may be obtained from MacKenzie Partners, Inc. at
212-929-5500.  Additional information concerning the terms of the
offer and the solicitation may be obtained by contacting CSFB at
1-800-820-1653.  Copies of the registration statement may be
obtained from the Securities and Exchange Commission's Internet
site at http://www.sec.gov/

American Seafoods, headquartered in Seattle, Washington, is the
largest harvester and at-sea processor of pollock and hake and the
largest processor of catfish in the United States.

At March 31, 2004, American Seafoods Group's balance sheet showed
a $93,208,000 stockholders' deficit, compared to a $112,141,000
deficit at December 31, 2003.


AMERIPATH INC: Reports $2.1 Million of Net Income in 2nd Quarter
----------------------------------------------------------------
AmeriPath, Inc., a leading national provider of cancer
diagnostics, genomics, and related information services, reported
its financial results for the second quarter and the six-month
period ended June 30, 2004.  As noted in the condensed
consolidated financial statements, the merger of AmeriPath on
March 27, 2003, resulted in a new basis of accounting for
AmeriPath.  In some cases, for ease of comparison purposes,
financial data for the period after the merger, March 28, 2003
through June 30, 2003, has been added to the financial data for
the period from January 1, 2003 through March 27, 2003
(predecessor period), to arrive at the six-month combined period
ended June 30, 2003.  This combined data is referred to herein as
six months 2003 or the combined six-month period ended June 30,
2003.

Net revenues for the second quarter of 2004 were $125.3 million
compared to $119.9 million in the second quarter of 2003.  Net
revenues for the six-month period ended June 30, 2004 were $251.1
million compared to $238.9 million for the combined six-month
period ended June 30, 2003.  Net revenues for the second quarter
of 2003 and the combined six-month period ended June 30, 2003 were
negatively impacted by charges to revenues of $2.3 million to
reflect changes in our estimated contractual allowances resulting
from an analysis of our managed care contracts.

Same store net revenues, excluding revenues from national labs,
for the second quarter of 2004 increased 6.6%, or $7.6 million,
when compared to the second quarter of 2003.  Same store net
revenues, excluding revenues from national labs, for the six-month
period ended June 30, 2004 increased 7.9%, or $18.0 million, when
compared to the combined six-month period ended June 30, 2003.
For the second quarter of 2004, national lab revenues were less
than $0.1 million, down from $1.0 million in the second quarter of
2003.  For the six-month period ended June 30, 2004, national lab
revenues were $0.2 million, down from $3.4 million for the
combined six-month period ended June 30, 2003.  This decline in
national lab revenues is consistent with our previous financial
statement disclosures that this business would be lost.

EBITDA (earnings before interest, taxes, depreciation and
amortization), which is a non-GAAP financial measure, for the
second quarter of 2004 was $19.5 million compared to $16.0 million
for the second quarter of 2003.  EBITDA for the six-month period
ended June 30, 2004 was $35.2 million compared to $26.1 million
for the combined six-month period ended June 30, 2003. A
reconciliation of net income to EBITDA is found in the attached
table.

Costs of services for the second quarter of 2004 increased to
$64.9 million (51.8% of net revenues) from $61.3 million (51.1% of
net revenues) in the second quarter of 2003.  Costs of services
for the six-month period ended June 30, 2004 increased to $131.6
million (52.4% of net revenues) from $123.5 million (51.7% of net
revenues) for the combined six-month period ended June 30, 2003.
The increases in costs of services as a percentage of net revenues
are primarily due to increased physician compensation and
increased courier and distribution costs associated with the
increased revenues from physicians' offices.

Selling, general and administrative expenses for the second
quarter of 2004 increased to $23.2 million (18.5% of net revenues)
from $22.5 million (18.7% of net revenues) in the second quarter
of 2003.  Selling, general and administrative expenses for the
six-month period ended June 30, 2004 increased to $47.5 million
(18.9% of net revenue) from $44.2 million (18.5% of net revenues)
in the combined six-month period ended June 30, 2003.  The
increase for the six-month period ended June 30, 2004 is primarily
due to severance of approximately $1.4 million for the Company's
former Chief Executive Officer, investments in information
technology and expansion of the sales and marketing efforts.  The
provision for doubtful accounts for the second quarter of 2004
increased to $18.5 million (14.7% of net revenues) from
$17.9 million (14.9% of net revenues) in the same period of 2003.
The provision for doubtful accounts for the six-month period ended
June 30, 2004 increased to $35.8 million (14.3% of net revenues)
from $32.9 million (13.8% of net revenues) in the combined six-
month period ended June 30, 2003.  The provisions for doubtful
accounts for the second quarter of 2003 and combined six-month
period ended June 30, 2003 were increased by charges of
$2.5 million to reflect the net realizable value of certain
receivables based on our analysis of the ability to collect
historical revenues and billings associated with clinical
professional component services.

Net income for the second quarter of 2004 was $2.1 million
compared to a net loss of $2.6 million for the same quarter of
2003.  Net income for the six-month period ended June 30, 2004 was
$1.8 million compared to a net loss of $1.0 million for the
combined six-month period ended June 30, 2003.

More detailed information regarding the business, operations and
financial performance of the Company through June 30, 2004, and
related and other matters will be included in the Company's Form
10-Q for the quarter ended June 30, 2004, which is expected to be
filed with the SEC on August 12, 2004.

AmeriPath is a leading national provider of cancer diagnostics,
genomics, and related information services.  The Company's
extensive diagnostics infrastructure includes the Center for
Advanced Diagnostics (CAD), a division of AmeriPath.  CAD provides
specialized diagnostic testing and information services including
Fluorescence In-Situ Hybridization (FISH), Flow Cytometry, DNA
Analysis, Polymerase Chain Reaction (PCR), Molecular Genetics,
Cytogenetics and HPV Typing. Additionally, AmeriPath provides
clinical trial and research development support to firms involved
in developing new cancer and genomic diagnostics and therapeutics.

                         *     *    *

As reported in the Troubled Company Reporter's February 16, 2004
edition, Standard & Poor's Ratings Services assigned its 'B+'
secured bank  loan rating and its recovery rating of '2' to
anatomic pathology laboratory AmeriPath Inc.'s proposed $190
million, six-year credit facility.  A recovery rating of '2'
indicates the likelihood of  substantial recovery of principal
(80%-100%) in the event of a default.

Standard & Poor's also assigned its 'B-' subordinated debt rating
to the company's proposed $75 million, 10-year senior subordinated
note issue.  At the same time, Standard & Poor's affirmed its 'B+'
corporate credit rating on AmeriPath.  The outlook is stable.

"The speculative-grade ratings reflect concern with AmeriPath's
aggressive growth through acquisitions in the U.S. market for
anatomic pathology services, a niche segment of the diagnostic
services market that is subject to reimbursement risks and
competitive uncertainties," said Standard & Poor's credit analyst
Jordan Grant.  "The ratings also reflect new management's
challenge to improve performance, while saddled with a debt burden
related to a 2003 LBO."


ARTEMIS INTERNATIONAL: Emancipation Discloses 13.3% Equity Stake
----------------------------------------------------------------
Emancipation Capital, LP, Emancipation Capital, LLC, and Charles
Frumberg beneficially own 1,526,700 shares of the common stock of
Artemis International Solutions Corporation, representing 13.3% of
the total outstanding common stock of the Company.  The entities
share voting and dispositive powers.

As of June 28, 2004, each of the entities may be deemed the
beneficial owner of:

     (i) 1,363,636 shares of common stock currently issuable to
         Emancipation Capital upon conversion of shares of Series
         A Convertible Preferred Stock, par value $0.001, of the
         Company;

    (ii) 136,364 shares of common stock currently issuable to
         Emancipation Capital upon exercise of warrants; and

   (iii) 26,700 shares of common stock purchased on the open
         market.

The Preferred Stock was acquired in a privately negotiated
transaction that was consummated on June 16, 2004 at a price of
$2.20 per share.  In connection with the issuance of the Preferred
Stock, Emancipation Capital received the Initial Warrants, which
have a five-year term and an exercise price of $2.60 per share.

The SEC report reflecting the beneficial ownership excludes any
additional 210-day warrants received by Emancipation Capital:

   (a) that are exercisable if, and only in the event that, the
       Six Month Price is below $2.20; and

   (b) to purchase a variable number of shares of common stock at
       $0.01 per share based on the Six Month Price. "Six Month
       Price" means the greater of $1.75 or the lowest average
       closing price of the common stock of the Company for any 15
       consecutive day period during the six month period
       immediately following June 16, 2004.

Emancipation Capital LLC acts as the general partner of
Emancipation Capital and has voting and dispositive power over the
securities held by Emancipation Capital.  The managing member of
Emancipation Capital LLC is Mr. Frumberg.  Emancipation Capital
LLC and Mr. Frumberg disclaim beneficial ownership of the
securities held by Emancipation Capital, except for their
pecuniary interest therein.

Although Emancipation Capital believes that it is not part of a
group, on June 16, 2004, Emancipation Capital, other purchasers of
the Company's common stock and Proha PLC, a shareholder of the
Company, entered into a letter agreement whereby the parties
agreed that for a period of two years commencing on June 16, 2004,
a nominating committee shall be the exclusive process by which
directors are nominated for election to the Board of Directors of
the Company.  Each party agreed to either

    (i) directly or indirectly vote in favor of; or

   (ii) directly or indirectly not oppose a candidate so nominated
        by the Board of Directors through its nominating
        committee.

Artemis International Solutions Corp. -- whose December 31, 2003
balance sheet shows a $2.5 million stockholders' deficit --
provides investment planning and control solutions that help
organizations execute strategy through effective portfolio and
project management.  Artemis has refined 30 years experience into
a suite of solutions and packaged consulting services that address
the specific needs of both industry and the public sector
including: IT management, new product development, program
management, fleet and asset management, outage management and
detailed project management.  With a global network covering 44
countries, Artemis is helping thousands of organizations to
improve their business performance through better alignment of
strategy, investment planning and project execution. For more
information visit http://www.aisc.com/


ASTROPOWER: Files Plan and Disclosure Statement in Delaware
-----------------------------------------------------------
Astropower, Inc., filed its Chapter 11 Liquidating Plan and an
accompanying Disclosure Statement with the U.S. Bankruptcy Court
for the District of Delaware.  A full-text copy of the Debtor's
Disclosure Statement explaining the Plan is available for a fee
at:

  http://www.researcharchives.com/bin/download?id=040812020022

The Plan is co-proposed by the Debtor and its Official Unsecured
Creditors Committee.  The Plan provides for the liquidation and
distribution of all of the Debtor's assets to all holders of
Allowed Claims.  Distributions to secured creditors will be made
in order of lien priority.

The Plan groups creditors and equity holders in six classes and
describes their treatment:

  Class                  Treatment
  -----                  ---------
  1 - Secured Claims     Unimpaired and deemed to have accepted
                         the Plan. At the Proponents' option,
                         holders will receive on the
                         Effective Date, or as soon as
                         practicable, in full satisfaction,
                         settlement, release and discharge of
                         and in exchange for such Allowed
                         Secured Claim:
                         (a) payment of the full amount of the
                             respective holder's Allowed Secured
                             Claim;
                         (b) all Collateral in the possession of
                             the Debtor securing the respective
                             holder's Allowed Secured Claim; or
                         (c) such other treatment as the
                             Liquidating Trustee or the Debtor
                             and the Creditor agree to in
                             writing.

  2 - Priority Claims    Unimpaired and deemed to have
                         accepted the Plan.  On the Effective
                         Date, or as soon as practicable, the
                         Allowed Claims in this Class, in full
                         satisfaction, settlement, release and
                         discharge of and in exchange for such
                         Allowed Priority Claim, will either
                         (a) be paid in full in Cash or
                         (b) receive such other treatment as the
                             Liquidating Trustee or the Debtor
                             and the Creditor agree to in
                             writing.

  3 - Unsecured Claims

  3A - Convenience       Impaired by the Plan.  The holders of
       Claims            Allowed Class 3A Claims shall be paid
                         on or as soon as practicable after the
                         Initial Distribution Date the lesser of
                         $500 or 50% of their Allowed Class 3A-
                         Convenience Claims in full
                         satisfaction, release and discharge of
                         and in exchange for such Allowed Class
                         3A - Convenience Claim. Only holders of
                         General Unsecured Claims who vote in
                         favor of the Plan may elect to have
                         their Claim treated as a Class 3A -
                         Convenience Claim.

  3B - General           Impaired by the Plan. On the Initial
       Unsecured         Distribution Date, the holders of
       Claims            Allowed Class 3B Claims will be granted
                         the beneficial interest in the
                         Liquidating Trust pursuant to the terms
                         of the Plan and Liquidating Trust
                         Agreement and holders of Allowed Claims
                         in this Class shall receive their Pro
                         Rata portion of the Liquidating Trust
                         Assets.

  4 - Intercompany       Impaired, and deemed to have
      Claims             rejected the Plan. Intercompany Claims
                         shall be forgiven, cancelled or waived
                         and holders of Class 4 Claims will not
                         be entitled to and will not receive or
                         retain any property or interest on
                         account of the Claims.

  5 - Subordinated       Impaired and deemed to have rejected
      Claims             the Plan. Will be cancelled, released,
                         and extinguished.

  6 - Equity Interests   Impaired and deemed to have rejected
                         the Plan. The Common Stock of the
                         Debtor will be cancelled, released and
                         extinguished on the Effective Date and
                         holders of Interests will receive no
                         distribution and will retain no
                         property on account of their Interests
                         in the Debtor.

Headquartered in Wilmington, Delaware, AstroPower Inc., produced
the world's largest solar electric (photovoltaic) cells and a full
line of solar modules. The Company filed for chapter 11 protection
on February 1, 2004 (Bankr. Del. Case No. 04-10322).  Derek C.
Abbott, Esq. at Morris, Nichols, Arsht & Tunnell, represents the
Debtor.  When the Company filed for protection from its creditors,
it estimated debts and assets of more than $100 million.  As of
Aug. 4, 2004, the Company sold substantially all of its assets and
its non-debtor subsidiaries.


BEAR STEARNS: Fitch Affirms Low-B Ratings on 2 Certificate Classes
------------------------------------------------------------------
Fitch Ratings affirms Bear Stearns Commercial Mortgage Securities
Corporation's commercial mortgage pass-through certificates,
series 1998-C1 as follows:

   -- $61.9 million class A-1 'AAA';
   -- $417.2 million class A-2 'AAA';
   -- Interest-only class X 'AAA';
   -- $35.7 million class B 'AA';
   -- $32.2 million class C 'A';
   -- $32.2 million class D 'BBB';
   -- $8.9 million class E 'BBB-';
   -- $12.5 million class F 'BB+';
   -- $5.4 million class H 'BB-';

Fitch does not rate the following classes:

   -- 12.5 million class G;
   -- $17.9 million class I;
   -- $4.6 million class J; and
   -- $5.9 million class K.

As of the July 2004 distribution date the pool has paid down 9.5%
to $646.9 million from $714.7 million at issuance.  Nine loans
(7.4%) have fully defeased.  Although credit enhancement has
increased, Fitch is concerned with the increasing number of loans
of concern within the transaction.  Nineteen loans (8.9%) reported
year-end (YE) 2003 debt service coverage ratios (DSCRs) below 1.00
times (x).

Orix Capital Markets, LLC, as master servicer, collected YE 2003
financials for 88.1% of the transaction.  As of YE 2003, the
weighted average DSCR for the pool has increased to 1.74x from
1.58 at issuance.  However, the YE 2003 performance has decreased
since the 1.89x DSCR reported at YE 2002.

Currently five loans (3.27%) are in special servicing.  The
largest specially serviced loan (1.27%) is secured by four real
estate owned (REO) industrial properties in and around Rochester,
New York.  The special servicer has since sold one property and is
actively marketing the remaining three.

The second largest specially serviced loan (0.95%) is secured by a
retail mall in St. Johnsbury, Vermont, and is pending return to
the master servicer.  The loan transferred to the special servicer
as a result of the property's largest tenant, Ames, filing
bankruptcy.  Ames subsequently rejected its lease and vacated the
property.  The borrower has kept the loan current and is actively
marketing the space.


C-BASS CBO: S&P Gives BB Rating to $15 Million Class E Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to C-BASS CBO XI Ltd./C-BASS CBO XI Corp.'s $479.5 million
floating- and fixed-rate notes.

The preliminary ratings are based on information as of Aug. 11,
2004.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect:

   -- The expected commensurate level of credit support in the
      form of subordination to be provided by the notes junior
      to the respective classes, the preference shares, and
      overcollateralization;

   -- The cash flow structure, which is subject to various
      stresses requested by Standard & Poor's;

   -- The experience of the collateral manager;

   -- The coverage of interest rate risks through hedge
      agreements (interest rate swap and cap); and

   -- The legal structure of the transaction, which includes the
      bankruptcy remoteness of the issuer.

C-BASS CBO XI Ltd. is the 11th cash flow arbitrage CBO brought to
market by Credit-Based Asset Servicing and Securitization LLC.

                  Preliminary Ratings Assigned
          C-BASS CBO XI Ltd./C-BASS CBO XI Corporation

         Class               Rating     Amount (mil. $)
         -----               ------     ---------------
         A                   AAA                  407.0
         B                   AA                    17.5
         C                   A                     20.0
         D                   BBB                   20.0
         E                   BB                    15.0
         Preference shares   N.R.                   5.0

              N.R. -- Not rated.


COLLINS & AIKMAN: Moody's Assigns B3 Rating to $400 Million Notes
-----------------------------------------------------------------
Moody's Investors Service assigned ratings for the proposed new
debt obligations of Collins & Aikman Products Co., which will
refinance the company's existing guaranteed senior secured credit
facilities and existing guaranteed senior subordinated notes.

In conjunction with the proposed partial refinancing of the
company's balance sheet and additionally incorporating updated
information obtained regarding the company's current operations
and near-to-intermediate term operating and cash flow generation
prospects, Moody's also affirmed Collins & Aikman's existing
guaranteed senior secured notes rating, corporate ratings, and
speculative grade liquidity rating and raised the company's rating
outlook to stable, from negative.

The following specific rating actions were taken:

   -- Assignment of B3 rating for Collins & Aikman's proposed
      $400 million of guaranteed senior subordinated notes due
      2012;

   -- Assignment of B1 rating for Collins & Aikman's proposed $675
      million of guaranteed senior secured credit facilities,
      consisting of:

      * $150 million revolving credit facility due 2009;

      * $125 million supplemental deposit-linked revolving credit
        facility due 2009;

      * $400 million term loan B due 2011;

   -- Affirmation of B2 rating for Collins & Aikman's $500 million
      of 10.75% guaranteed senior unsecured notes due December
      2011;

   -- Affirmation of Collins & Aikman's B1 senior implied rating;

   -- Affirmation of Collins & Aikman's B2 senior unsecured issuer
      rating; and

   -- Affirmation of Collins & Aikman's SGL-3 speculative grade
      liquidity rating.

Upon Collins & Aikman's closing of the proposed transactions,
Moody's will withdraw the B1 ratings of the existing senior
secured credit facilities which consist of approximately $620
million of remaining commitments as well as the B3 rating of the
existing $400 million of 11.5% guaranteed senior subordinated
notes due April 2006.

The company continues to have access to its $250 million accounts
receivable securitization facility which currently matures during
December 2004, and additionally to various small lines of short-
term credit and factoring arrangements around the world.

The ratings continue to reflect Collins & Aikman's currently
marginal EBIT coverage of cash interest, high leverage, and
significant absolute debt level.  The amount of the company's
outstanding debt has, in fact, increased over the past year as a
result of various operating factors including ongoing
restructuring payments; expenditures associated with a large
volume of new product launches; high capital expenditures
supporting new business and labor reductions; and rising levels of
permanent working capital resulting from slowed customer tooling
payments and a decision to quicken the turnover rate for accounts
payable to be more in line with current trade terms.  The
company's cash flow generation from core operations has been
breakeven at best over the last twelve months.

Collins & Aikman continues to be pressured to offset annual
customer give-backs approximating 2% of revenues with productivity
savings.  The restructuring actions, which are nearing completion
have largely eliminated Collins & Aikman's excess labor, and the
company is now addressing improvements to its raw materials
purchasing practices.  However, the rising price of petroleum-
derived resin commodities utilized within Collins & Aikman's
plastics operations have presented a particular challenge to
realization of improvements to the company's cost base.
Management believes that it has been successful in holding these
costs relatively flat through more effective volume purchasing,
stepped-up vertical integration which now includes more internal
compounding of resins, and customer surcharges.  However, the
company has not been able to realize reductions in resin costs, as
would normally be its goal.  While Collins & Aikman is slowly
expanding its customer and geographic base through new business
awards, the company still remains highly exposed to production
levels for the domestic Big Three.  The competitive environment
remains difficult, and the company's customer base continues to
actively market test certain product lines.  However, the company
maintains that it has in fact won a net positive dollar amount of
profitable conquest business as a result.

The affirmation of Collins & Aikman's SGL-3 speculative grade
liquidity rating reflects Moody's belief that the company's near-
term liquidity remains adequate.  While the new credit agreement
will extend maturities and add approximately $55 million of
incremental borrowing availability with significant covenant
cushion, ongoing availability under certain other external
liquidity sources remains somewhat uncertain.  The early-pay
accounts receivable discounting arrangements with Chrysler and
General Motors utilizing intermediary GE Capital are reportedly
about to wind down during 2005 due to recent concerns regarding
the future accounting treatment of these transactions.  The
company acknowledges that it will potentially be unable to replace
the approximately $100 million of additional liquidity that has
been provided by these OEM's under the early-pay arrangements.
However, management expects that a good portion of the
availability shortfall can be realized through the company's
existing $250 million accounts receivable securitization by virtue
of the higher level of receivables that will support the facility.
Collins & Aikman may purchase swaps to reduce the degree of
reserves otherwise required due to high customer concentrations.
However, the existing accounts receivable securitization currently
has a December 2004 maturity.  While Collins & Aikman fully
expects to renew this arrangement without incident, negotiations
to do so have not yet been initiated.  Collins & Aikman's
operations have notably been generating negative operating cash
flows after capital expenditures, and this measure of cash flow
performance its not expected to turn positive until some point in
2005.

The affirmation of Collins & Aikman's existing fundamental debt
ratings and the change of the rating outlook to stable, from
negative, reflect that Collins & Aikman has demonstrated steady
consecutive quarterly improvement in its operating margins over
the past year.  The company has notably turned around to
breakeven-or-better the performance of all 12 of the problem
plants which were generating negative $18 million of EBITDA on 11%
of consolidated revenues just one year ago.  Collins & Aikman has
additionally re attained "green" status with Chrysler, its largest
customer.  Chrysler is again awarding new business to Collins &
Aikman, is realizing success with its recent product
introductions, and is no longer looking to transfer material
amounts of existing Collins & Aikman business to other suppliers.
Collins & Aikman has been awarded $1.8 billion of gross annualized
new business awards since January 2003, which will serve to
enhance the revenue base to include more programs for the domestic
transplants and European OEM's.  This should help stem any
material loss of market share by Collins & Aikman, which currently
enjoys industry leading #1 and #2 positions across almost all of
its product lines. Collins & Aikman is also in the process of
launching approximately $915 million of annualized new business
during 2004.  The average content per vehicle for new programs is
steadily rising, as Collins & Aikman realizes an increased rate of
cross-selling among its product lines.  Cash outflows associated
with restructuring activities will be substantially completed by
the end of 2004, and the company expects to realize annualized
savings approximating $70 million from these efforts.  The company
additionally believes that it has recorded the bulk of non-cash
impairment costs for fixed assets and intangibles necessary to
reflect current business conditions and completion of the
integration of the company's string of acquisitions during 2001
and 2002.

Moody's decision to change the outlook to stable also reflects our
belief that terms of the proposed partial refinancing will allay
concerns regarding liquidity over the ratings horizon, given the
extended maturities, limited interim principal amortization
requirements, and significant loosening of the proposed senior
credit agreement covenants.  It is expected that the maximum bank
leverage requirement will be set at 5.0x through September 2006
and that the minimum bank interest coverage ratio will be set at
2.0x through September 30, 2005.  The company's senior management
team appears to have stabilized, with no transitions reported
since David Stockman took over as CEO in August 2003.  Private
equity firm Heartland Industrial Partners and its co-investors,
which was founded by David Stockman, continues to maintain a
substantial cash investment of in excess of $400 million in
Collins & Aikman, along with about 40% ownership and current
control of the board of directors.  The audit committee review of
assertions concerning certain accounting and non-accounting issues
associated with related party transactions which was a concern to
Moody's when the outlook was established as negative was concluded
in 2004 without incident.

Future events that have potential to drive Collins & Aikman's
ratings down include:

   -- a failure of the company to begin generating sustainable
      positive cash flow for debt reduction during 2005 as
      planned;

   -- an inability to offset future customer pricing give-backs
      with productivity savings;

   -- surging raw materials prices which cannot be hedged in any
      way;

   -- complications associated with critical new business launches
      including quality problems, rising engineering and launch
      costs, delayed launches, an inability to recoup reimbursable
      tooling amounts, etc.;

   -- unexpected declines in liquidity including an inability to
      extend the accounts receivable securitization; evidence of
      lost market share or a decline in the rate of new business
      generation; initiation of cash payments of preferred
      dividends; new senior management upheavals; and

   -- a material acquisition.

Future events that have potential to drive improvements in Collins
& Aikman's ratings and outlook include positive operating cash
flow generation applied to debt reduction, an incremental offering
of common equity, steadily rising liquidity and cash interest
coverage, and improved diversification of the company's customer
base and geographic base of revenues.

The proposed new $675 million of guaranteed senior secured credit
facilities will be incorporated within an amendment and
restatement of Collins & Aikman's existing credit agreement.  The
B1 rating assignments reflect the benefits and limitations of the
proposed collateral and guarantee package.  Collateral will
consist of first-priority perfected liens on substantially all
assets of Collins & Aikman, of its parent Collins & Aikman
Corporation, and of all existing or subsequently added domestic
subsidiaries other than the receivables subsidiary.  This will
include pledges of 100% of the capital stock of Collins & Aikman
and its domestic subsidiaries, and up to 65% of the stock of
foreign subsidiaries. All of the facilities will be secured on a
pari passu basis.  Guarantors of all of the obligations under the
senior secured credit agreement will include Collins & Aikman
Corporation and all of the domestic subsidiaries.  Mandatory
prepayments will include a 50% excess cash flow recapture
provision.  Scheduled amortization under the proposed term loan B
will be 1% p.a., with a balloon payment at maturity. Voluntary
prepayments of the term loan B during the first year post closing
will have price protection of $101.

Under the proposed supplemental deposit-linked revolving credit
facility, lenders will deposit funds with the agent bank at
closing to support estimated usage of the facility for direct loan
purposes.  The facility may also be utilized to support Collins &
Aikman's contingent letters of credit requirements. Revolving
loans under this supplemental deposit-linked revolving credit
facility will be funded from the lender deposits and can be drawn,
repaid, and reborrowed.  To the extent that Collins & Aikman does
not fully draw down the supplemental facility, the deposited funds
will be invested by the agent bank to realize a return
approximating Libor, and Collins & Aikman will required to pay the
spread over Libor for the unused commitment amount.

The B3 rating of the proposed new $400 million of guaranteed
senior subordinated notes due 2012 reflects the contractual
subordination of these notes to all of Collins & Aikman's senior
secured and unsecured debt.  The notes will be unsecured and
guaranteed on a senior subordinated basis by the guarantors of the
senior secured credit agreement.  The proposed notes will be non-
call until 2008 and will contain a 35% equity clawback provision
and a change of control provision.

Cash payments of preferred dividends, which would otherwise be
payable beginning during 2004 under the preferred stock securities
held by Textron Inc. (received as part of the seller financing for
the TAC-Trim acquisition) are precluded from being paid by the
terms of Collins & Aikman's credit agreement and other debt
agreements.  These amounts therefore continue to be paid in kind
and added to the liquidation preference. The only recourse that
Textron Inc. has for non-payment of the dividends when due is the
designation of two seats on the board of Collins & Aikman, the
operating company.

Pro forma for the proposed transactions over the last twelve
months ended June 30, 2004 Collins & Aikman's total debt/EBITDA
leverage incorporating only on-balance sheet funded debt in the
numerator is 4.1x. Pro forma total debt/EBITDAR leverage including
the company's $277 million of preferred stock (at full liquidation
value plus dividend accretion to date) in the numerator was
approximately 4.9x and 5.7x, respectively, before and after also
treating as debt accounts receivable securitization usage, letters
of credit, and the present value of operating leases.  Moody's
considers the preferred stock to have several debt-like
characteristics and believes that Collins & Aikman will be
motivated to refinance the remaining balance over the near-to-
intermediate term. Pro forma EBIT coverage of cash interest is
marginal at approximately 1.4x, while the EBIT return on total
assets is weak at about 6.0%.  Moody's EBITDA calculation for the
LTM period of $336.3 million added back $95.5 million of
restructuring and impairment charges.

Collins & Aikman Corporation, headquartered in Troy, Michigan, is
a leading designer, engineer, and manufacturer of automotive
interior components, including,

   * instrument panels;
   * fully assembled cockpit modules;
   * floor and acoustic systems; automotive fabric;
   * interior trim; and
   * convertible top systems.

The company has content on approximately 89% of all North American
light vehicle platforms. Collins & Aikman's common stock is
publicly listed on the NYSE, but is thinly traded given that
approximately 66% of shares are owned by insiders. Annual revenues
currently approximate $4 billion.


COMMUNITY GENERAL: Moody's Upgrades Debt Rating to Ba2 from Ba3
---------------------------------------------------------------
Moody's Investors Service has upgraded Community General Hospital
of Greater Syracuse debt rating to Ba2 from Ba3. The outlook is
revised to stable from negative. This rating action affects $16.7
million of outstanding debt, including the Series 1993A
Certificates, the Series 1993B Certificates, and the Series 1998
Certificates.  The rating action reflects:

   (1) two years of improving operating performance through FY
       2003,

   (2) improvement in liquidity that had previously been
       dangerously low, and

   (3) Community General's re-establishment as an independent
       hospital and full separation from bankrupt Crouse Hospital.

These credit strengths are offset by

   (A) Community General's moderate market share when compared to
       three larger competitors within close proximity,

   (B) declining inpatient and outpatient volume trends,

   (C) capital spending requirements that we believe will reduce
       balance sheet liquidity, and

   (D) weak service area demographics.

Moody's stable outlook reflects our expectation that operating
performance improvements over the past two years will be
sustained, but that balance sheet liquidity may weaken due to
capital spending requirements.

Moody's rating analysis reflects CGH Health Services and its
corporate affiliates that include: Community General Hospital,
Community General Foundation, CGH Properties, CGH Office Building,
and Community General Enterprises.  GH Health Services is
headquartered in Syracuse, New York (Onondaga County).

Security: The Series 1993A, 1993B, and 1998 bonds are secured by a
pledge of Community General's gross revenue receipts.

Re-establishment as an independent hospital by Community General,
along with the removal of any legal recourse or financial costs
stemming from the bankruptcy of its prior affiliate and the
dissolution of its "parent" is viewed as a credit positive by
Moody's.  In February 1999, Community General and Crouse Hospital
(576 beds, 17,800 admissions, 5 miles from Community General,
27.3% market share) affiliated under a common parent, The Health
Alliance of CNY.  On November 22, 2002, Community General began
operations as an independent hospital after the dissolution of the
affiliate structure primarily due to the February 21, 2001 Chapter
11 bankruptcy filing of Crouse Hospital.  One-time legal and
severance costs associated with the dissolution of The Health
Alliance negatively impacted operating performance at Community
General by $1.2 million in FY 2002 and $328K in FY 2003.

Moody's believes that credit weakness is derived from Community
General's declining market position in Onondaga County.  Community
General is the smallest of Onondaga County's four hospitals with
a 14.1% market share, which has declined 1.3% in the last three
years.  Primary competitors include former affiliate Crouse
Hospital, St. Joseph's Hospital (431 beds, 22,000 admissions,
5 miles from Community General, 34.2% market share), and
University Hospital (366 beds, 15,900 admissions, 5 miles from
Community General, 24.4% market share).

We believe that Community General maintains only a modest
competitive niche in the market, with a lack of unique clinical
services, although we note that Community General has been
developing its clinical core with new services such as a 20 bed
physical medicine and rehabilitation unit and a pending cardiac
catherization service.  In addition, Community General faces
competitive threats from ambulatory surgery centers -- ASCs.  The
opening of ASC's during the past three years, both physician owned
and hospital owned, are the primary reason for declines in
outpatient surgical volumes at Community General.  We anticipate
that existing ASC's will continue to reduce outpatient volumes at
Community General.  To stem the loss, management indicates that it
is pursuing its own outpatient strategies including the cardiac
catherization lab and a joint-venture endoscopy center scheduled
to open in 2005.

The population of Onondaga County fell 2.7% between 1992 and 2002
to 460,775 from which Community General draws 85% of its inpatient
admissions.  While Community General is located in a desirable
suburban environment relative to its three competitors, all of
which are located in downtown Syracuse, population growth has
historically been closer to Community General's competitors.
Furthermore, Syracuse's unemployment rate is 8.9% due to the
closure of manufacturing plants over the past three years, though
Onondaga County's unemployment rate is much more favorable and
remains equivalent to the national average.  Moody's believes that
the overall decline in PSA population, lack of unique clinical
services, and the close proximity of competitors presents a risk
of inpatient declines for Community General.

However, Moody's does view favorably Community General's
partnership agreement with St. Joseph's hospital to support the
advent of cardiac catherization procedures at Community General.
St. Joseph's operates one of the area's largest open heart
programs.  Management anticipates its recently filed CON
application will receive approval, which we anticipate will
improve Community General's cardiology services and strengthen
Community General's ability to support care by other specialties,
somewhat mitigating softness in surgical volumes.  Additionally,
newborn admission volume is anticipated to improve from several
years of decline as Community General completes renovations to its
labor and delivery units in FY 04.

FY 2003 was the second year of improving operating performance for
Community General, representing a recovery from historical losses
in FY 2000 and FY 2001 that contributed to Moody's previous
downgrade.  In FY 2003, Community General generated total
operating income of $35 thousand, which represented an improvement
over FY 2001's operating loss of $7.6 million.  FY 2003 operating
performance was enhanced by a 30% decline in bad debt expenses
attributable to improved cash recovery efforts by Community
General.  For the second straight year, operating revenues
remained flat with FY 2003 inpatient admissions declining 4.1% or
451 cases (we note that observation stays increased by
approximately 670, half of which were directly related to a shift
from inpatient status).

Between FY 1999 and FY 2003, operating profit margins improved
from -1.4% (FY 1999) to a five-year breakeven high of 0.0% (FY
2003).  Between FY 2001 and 2003, operating cash flow margins
improved from -0.9% (FY 2001) to 6.5% (FY 2003).  Despite
declining inpatient volumes in FY 2002 and FY 2003, improvement in
the Community General's operating performance was primarily
attributable to revenue cycle initiatives that resulted in a
decline in bad debt provisions, an increase in payor rates, and an
improvement in the mix of patients and services to higher
reimbursed surgical cases.

Through the first three months of FY 2004, Community General's
operating performance has improved compared to the prior period
with operating margin improving to 1.6% based on operating income
of $409,000, as compared to $305,000 in the prior year period.
Management anticipates that FY 2004 operating performance will
exceed FY 2003, attributable to improved inpatient volumes as a
result of physician recruiting efforts and expected improvements
in its contracts with non-governmental payors.  We believe
Community General should be able to sustain the improvement in its
operating performance going forward, which is a primary factor in
our rating upgrade.

Due to improved operating performance, Community General's balance
sheet strengthened in FY 2003.  Unrestricted cash and investments
improved 30% to $15.2 million in FY 2003 from $11.7 million in
FY 2002, which was a substantial improvement from $6.6 million in
2000.  Days cash on hand improved 15.1 days to 61 days in FY 2003,
from FY 2002, and from a low of only 27 days in 2000.  Cash-to-
debt improved from 29% in 2000 to a much healthier 91% in FY 2003.
From FY 2002 to FY 2003, Debt-to-Cash Flow coverage improved from
5.14X to 2.83X, representing improvement from 2000 when Debt-to-
Cash Flow coverage was negative 5.49X due to negative operating
cash flow generation by Community General.  Maximum Annual Debt
Service -- MADS -- Coverage improved from 1.42X to 2.04X in
FY 2003, representing improvement over the 2000 MADS level of
negative .68X (Moody's smoothes investment income at 6% and does
not include it on our calculation of operating income).

With capital investment trailing depreciation expenditures,
capital investment has been curtailed over the past four years
at Community General.  Capital expenditures are budgeted at
$9.7 million in FY 2004, from FY 2003 at $3.1 million, with
approximately $6 million of capital expenditures to be financed
from unrestricted cash balances.  With increased capital spending
requirements, Community General's balance sheet liquidity is
expected to be negatively impacted which will heighten Community
General 's risk profile.

                      Key Data and Ratios
              (based on FY 2003 Audited Financial
                Statements for Community General)

Inpatient Discharges: 9,220

Operating Revenues: $95.9 million

Net Revenues Available for Debt Service: $7.2 million

Total Debt Outstanding: $16.8 million

Days Cash-on-Hand: 61 days

Cash-to-Debt: 90.7%

Maximum Annual Debt Service Coverage: 2.04 times

Debt-to-cash-flow: 2.83 times

Operating Cash Flow Margin: 6.5%

Contacts: Ms. Pamela Johnson
          Chief Financial Officer
          315-492-5731

                            Outlook

Moody's stable outlook reflects our expectation that operating
performance improvements over the past two years will be sustained
but that balance sheet liquidity may weaken as capital spending
increases.


COOPERHEAT-MQS: Team Inc. Completes $35 Million Asset Purchase
--------------------------------------------------------------
Team Inc. (AMEX:TMI) completed its purchase of substantially all
of the assets of Cooperheat-MQS Inc. and its parent company,
International Industrial Services, Inc.  The purchase price was
$35 million in cash plus the assumption of $1.7 million in letters
of credit.  The entire purchase price was financed through an
expanded senior credit facility provided by Team's primary lender,
Bank of America.

"The addition of the Cooperheat-MQS assets and related business is
a very significant and exciting step forward for Team," said Phil
Hawk, Team's chairman and CEO.  "This acquisition extends the
company's overall market leadership in specialty industrial
services and provides an even stronger basis for continued organic
business growth going forward.  Financially, this opportunity is
just as exciting.  Once Team works through the usual integration
issues associated with this type of acquisition, Team expects
overall earnings potential of the company to double," said Mr.
Hawk.

Cooperheat-MQS is a leading provider of non-destructive testing
(NDT) inspection and field heat treating services throughout the
U.S. and Canada with projected 2004 revenues expected to be
approximately $80 million.  With the addition of these assets,
Team becomes one of the largest specialty industrial service
companies in North America with annual revenues expected to be
nearly $200 million.  Team now is the largest provider of NDT
inspection, field heat treating, on-stream leak repair, and
fugitive emissions monitoring services along with significant
positions in hot tapping, field machining, technical bolting, and
field valve repair services.

Team intends to integrate the Cooperheat-MQS assets and associated
business activity into Team and then to continue the company's
long-standing focus on significant organic business growth.  The
company's goal is to continue its 10%-plus organic business growth
by capitalizing on our outstanding service capabilities and the
growing customer preferences for consolidating industrial services
purchases with fewer, larger service companies, such as Team.
Despite the substantial increase in the size of the company
following the acquisition, the company believes there is still
significant organic growth opportunity for Team.  Team's composite
market share is still less than 15% in this highly fragmented
industry.  Because of the continued inherent operating leverage in
this business, Team expects its profit growth to continue to
outpace revenue growth.

Because of the significant integration and transition activities
and some uncertainty related to the current momentum of the
Cooperheat-MQS business after operating under bankruptcy
protection since December 31, 2003, Team's ability to precisely
estimate near-term earnings is limited.  "While somewhat
counterintuitive, we are more confident in our performance
estimates for next fiscal year 2006 ending May 31, 2006, when we
expect to have completed all of the transition steps and addressed
any temporary business losses as a result of the Cooperheat-MQS
bankruptcy," said Mr. Hawk.  "For FY 2006, we expect total
revenues to be approximately $215 million to $230 million with
corresponding earnings per share (fully diluted basis) in the
$1.25 to $1.40 per share range, representing an approximate
doubling of earnings over two years versus actual FY04 earnings of
$0.69 per share."

The company believes the acquisition will also be accretive to
earnings in the current fiscal year, but will defer any changes in
the current year guidance until the near-term transition plans are
fully developed.  Team's earnings guidance for FY05 ending May 31,
2005 remains at $0.84 to $0.90 per share.  Regarding Team's
projected earnings for FY05, the company expects these earnings to
be more heavily oriented to the company's second and fourth
quarters than in previous years.  First quarter results without
the effect of the Cooperheat-MQS acquisition are likely to be
below prior year results due primarily to reduced turnaround
activity driven by extremely high refining margins.  These
turnaround schedule changes are a timing issue, not a demand
reduction issue.  Team remains confident in and comfortable with
the full year outlook.

                         About Team Inc.

Team is a professional, full-service provider of specialty
industrial services.  Team's current industrial service offering
encompasses on-stream leak repair, hot tapping, fugitive emissions
monitoring, NDT inspection, field machining, technical bolting,
field valve repair and field heat treating.  All these services
are required in maintaining high temperature, high pressure piping
systems and vessels utilized extensively in the refining,
petrochemical, power, pipeline and other heavy industries.
Headquartered in Alvin, Texas, Team operates in over 40 customer
service locations throughout the United States.  Team also serves
the international market through both its own international
subsidiaries as well as through licensed arrangements in 14
countries.  Team's common stock is listed on the American Stock
Exchange and trades under the ticker symbol "TMI".

Cooperheat-MQS is a leading provider of non-destructive testing
(NDT) inspection and field heat treating services throughout the
U.S., and its projected 2004 revenues are estimated to be
approximately $80 million.

                         *     *     *

As reported in the Troubled Company Reporter's July 23, 2004,
edition, Team Inc. (AMEX:TMI) was the successful bidder at an
auction to acquire substantially all of the assets of Cooperheat-
MQS Inc. and its parent company, International Industrial Services
Inc. (together, Sellers) for $35 million in cash, subject to an
adjustment for working capital changes to the date of closing.
Team expects financing provision through a senior secured
financing commitment offered by its primary lender.

Team's successful bid is subject to Bankruptcy Court approval at a
hearing expected to be held on Aug. 9, 2004, and is subject to
certain other customary conditions.  Closing is expected to occur
within 30 days following Bankruptcy Court approval.  Each Team and
Sellers may elect to terminate the transaction if closing has not
occurred by Sept. 10, 2004.


COVANTA ENERGY: Covanta Tampa Plan Declared Effective on Aug. 6
---------------------------------------------------------------
Vincent E. Lazar, Esq., at Jenner & Block, in Chicago, Illinois,
advised the Court that as of August 6, 2004, each of the
conditions precedent to the Effective Date under the Covanta
Tampa Reorganization Plan occurred or was waived in accordance
with the provisions of the Plan.  Accordingly, on August 6, 2004,
the Covanta Tampa Plan became effective and the Covanta Tampa
Debtors emerged from bankruptcy protection.

                     Professional Fees Bar Date

In accordance with the Covanta Tampa Plan and any applicable
Court order, all applications related to fees and expenses of (i)
bankruptcy professionals and (ii) persons employed by the Covanta
Tampa Debtors or serving as independent contractors to the
Covanta Tampa Debtors in connection with their reorganization or
liquidation efforts must be filed with the Court and served on
counsel of Covanta Tampa Bay, Inc. and Covanta Tampa
Construction, Inc., on or before September 20, 2004, 4:00 p.m.,
prevailing Eastern Time.

                 Rejected Contract Claim Bar Dates

All claims arising out of the rejection by the Covanta Tampa
Debtors of executory contracts and unexpired leases must be filed
with the Court and served on the Covanta Tampa Debtors' counsel,
by August 26, 2004, 4:00 p.m., prevailing Eastern Time.

                      Distribution Record Date

The Distribution Record Date under the Plan with respect to all
Classes of interests and claims is August 6, 2004.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad.  The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities.  (Covanta Bankruptcy News, Issue
No.  63; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CROWN HOLDINGS: Prices EUR350 Million 6.25% Senior Secured Notes
----------------------------------------------------------------
Crown Holdings, Inc. (NYSE: CCK) has priced euro 350 million of
6.25% first priority senior secured notes due 2011.  The notes
will be issued at par by Crown European Holdings SA, a subsidiary
of the Company, and will be unconditionally guaranteed by the
Company and certain of its subsidiaries.  Alan Rutherford,
Executive Vice President and Chief Financial Officer,
commented, "We are extremely pleased with the demand for this
issuance which we believe to be one of the largest and most
competitively priced euro high yield offerings to date in 2004."

The Company has also received a commitment from Citicorp North
America, Inc. to provide a new $125 million term loan with final
maturity in 2011.  The proceeds from the senior secured notes and
new term loan will be used to repay the Company's existing term
loans which mature in 2008.

In addition, the Company is reviewing the terms of a new revolving
credit facility that would be used to refinance its existing
revolving credit facility which matures in 2006.  The new term
loan and any proposed new revolving credit facility will close
simultaneously with the euro 350 million first priority senior
secured notes on September 1, 2004.  The 6.25% first priority
senior secured notes offering, the new term loan and any new
revolving credit facilities are subject to certain conditions,
including any required consents, and the final terms of the new
term loan and revolving credit facilities are still under
discussion with financing sources.

The senior secured notes are expected to be issued through a
private placement and resold by the initial purchasers to
qualified institutional buyers under Rule 144A of the Securities
Act of 1933 and Regulation S.  The senior secured notes will not
be registered under the Securities Act and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements.  This press release
does not constitute an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction in which such offer
or sale would be unlawful.

                         *     *    *

As reported in the Troubled Company Reporter's August 10, 2004,
edition, Standard & Poor's Ratings Services assigned its 'BB' bank
loan rating and a recovery rating of '1' to Crown Holdings Inc.'s
proposed $500 million senior secured credit facilities due
February 2010, based on preliminary terms and conditions.  The
borrowing entities are Crown European Holdings SA and Crown
Americas Inc.  The bank loan rating is rated one notch above the
corporate credit rating; this and the '1' recovery rating indicate
a high expectation of full recovery of principal in the event of
default.

At the same time, Standard & Poor's assigned its 'BB' rating and
a '1' recovery rating to the proposed $550 million first priority
senior secured notes due 2011, which are to be issued under Rule
144A with registration rights by Crown European Holdings SA and
will be guaranteed by Crown Holdings Inc.  The 'BB' rating is one
notch above the corporate credit rating; this and the '1' recovery
rating indicate a high expectation of full recovery of principal
in the event of default.  Proceeds are expected to be used to
finance the outstanding bank debt, and for fees and expenses.

Standard & Poor's also affirmed its 'BB-' corporate credit rating
and other existing ratings on the Philadelphia, Pennsylvania-based
company.  The outlook is stable.  Crown had outstanding total debt
of about $4 billion at June 30, 2004.

"The ratings on Crown reflect its aggressive financial profile,
onerous debt burden, and risks associated with its asbestos
litigation, all of which overshadow its average business risk
profile," said Standard & Poor's credit analyst Liley Mehta.


CWMBS INC: Fitch Junks Two Series 1999-13 Certificate Classes
-------------------------------------------------------------
Fitch Ratings has upgraded 21, affirmed 11, downgraded two, and
placed two classes on Rating Watch Negative from the following
CWMBS (Countrywide Home Loans), Inc. residential mortgage-backed
securitizations:

   CWMBS (Countrywide Home Loans, Inc.),
   mortgage pass-through certificates, series 1999-9

      -- Class A affirmed at 'AAA';
      -- Class M upgraded to 'AAA' from 'AA+';
      -- Class B1 upgraded to 'AA+' from 'A+';
      -- Class B2 upgraded to 'A+' from 'BBB+';
      -- Class B3 upgraded to 'BBB' from 'BB';
      -- Class B4 upgraded to 'BB' from 'B'.

   CWMBS (Countrywide Home Loans, Inc.),
   mortgage pass-through certificates, series 1999-13 (Alt 1999-2)

      -- Class A affirmed at 'AAA';
      -- Class M upgraded to 'AAA' from 'AA';
      -- Class B1 upgraded to 'AA' from 'A';
      -- Class B2 affirmed at 'BBB';
      -- Class B3 downgraded to 'CCC' from 'BB';
      -- Class B4 downgraded to 'C' from 'B'.

   CWMBS (Countrywide Home Loans, Inc.), mortgage
   pass-through certificates, series 2001-21 (Alt 2001-10)

      -- Class A affirmed at 'AAA';
      -- Class M affirmed at 'AAA';
      -- Class B1 upgraded to 'AAA' from 'AA-';
      -- Class B2 upgraded to 'A' from 'BBB';
      -- Class B3 affirmed at 'BB';
      -- Class B4 rated 'B', and placed on Rating Watch Negative.

   CWMBS (Countrywide Home Loans, Inc.), mortgage
   pass-through certificates, series 2002-13 (Alt 2002-8)

      -- Class A affirmed at 'AAA';
      -- Class M upgraded to 'AAA' from 'AA';
      -- Class B1 upgraded to 'A+' from 'A';
      -- Class B2 upgraded to 'BBB+' from 'BBB';
      -- Class B3 affirmed at 'BB';
      -- Class B4 rated 'B', and placed on Rating Watch Negative.

   CWMBS (Countrywide Home Loans, Inc.),
   Mortgage Pass-Through Certificates, Series 2002-34

      -- Class A affirmed at 'AAA';
      -- Class M upgraded to 'AAA' from 'AA';
      -- Class B1 upgraded to 'AA' from 'A';
      -- Class B2 upgraded to 'A-' from 'BBB';
      -- Class B3 upgraded to 'BB+' from 'BB;
      -- Class B4 upgraded to 'B+' from 'B.'

   CWMBS (Countrywide Home Loans, Inc.),
   Mortgage Pass-Through Certificates, Series 2002-36

      -- Class A affirmed at 'AAA';
      -- Class M upgraded to 'AAA' from 'AA';
      -- Class B1 upgraded to 'AA' from 'A';
      -- Class B2 upgraded to 'BBB+' from 'BBB';
      -- Class B3 upgraded to 'BB+' from 'BB';
      -- Class B4 affirmed at 'B'.

The upgrades reflect a significant increase in credit enhancement
relative to future loss expectations.  The affirmations on the
above classes reflect credit enhancement consistent with future
loss expectations.

The negative rating actions are the result of a review of the
level of losses incurred to date as well as Fitch's future loss
expectations on the delinquent loans in the pipeline relative to
the applicable credit support levels as of the July 25, 2004
distribution.


DAYTON SUPERIOR: Schedules Q2'04 Earnings Release on Aug. 18
------------------------------------------------------------
Dayton Superior will broadcast a conference call to discuss its
second quarter earnings on Wednesday, August 18, 2004, at 11:00
a.m., EDT.  The call will be conducted by Steve Morrey, President
and CEO, and Ed Puisis, Vice President and CFO.

Interested parties may participate in the call by telephone.
Please call (703) 639-1423 at least 10 minutes before the start of
the call to register.

A replay of the call will be available from 4:00 p.m. EDT,
Wednesday, August 18, 2004, until 11:59 p.m., EDT, Saturday,
August 28, 2004.  Please call 1-703-925-2533 and enter reservation
#537747.

Dayton Superior is the largest North American manufacturer and
distributor of metal accessories and forms used in concrete
construction, and a leading manufacturer of metal accessories used
in masonry construction in terms of revenues.  The company's
products are used in two segments of the construction industry:
infrastructure construction, such as highways, bridges, utilities,
water and waste treatment facilities and airport runways, and non-
residential building, such as schools, stadiums, prisons, retail
sites, commercial offices, hotels and manufacturing facilities.
The company sells most products under the registered trade names
Dayton Superior(R), Dayton/Richmond(R), Symons(R), Aztec(R),
BarLock(R), Conspec(R), Edoco(R), Dur-O-Wal(R) and American
Highway Technology(R).

                         *     *     *

As reported in the Troubled Company Reporter's June 17, 2004,
edition, Standard & Poor's Ratings Services lowered its ratings on
Dayton Superior Corp., a concrete construction products
manufacturer.  The outlook is negative.

Standard & Poor's lowered its corporate credit and senior secured
ratings on Dayton Superior to 'B-' from 'B', and the subordinated
debt rating to 'CCC' from 'CCC+'.

"The downgrade reflects Dayton Superior's very weak cash flow
protection measures and narrow liquidity. The lingering impact of
the lengthy downturn in commercial construction markets and
skyrocketing steel prices have combined to reduce earnings and
cash flows to subpar levels," said Standard & Poor's credit
analyst Pamela Rice.


DII/KBR: AMS Objects to Halliburton Securities Fraud Settlement
---------------------------------------------------------------
Court-appointed Lead Plaintiff AMS Fund, Inc., a non-profit
charitable organization represented by Scott + Scott, LLC, does
not approve of the present proposed/preliminarily approved
Halliburton (NYSE: HAL) securities fraud settlement.

On June 7, 2004, United States District Court Judge David Godbey
of the United States District Court for the Northern District of
Texas (Judge Godbey has since recused himself from this case)
preliminarily approved the proposed settlement of a consolidated
securities class action against Halliburton Company and other
individual defendants for $6 million.  Lead Plaintiff AMS Fund
opposes both this proposed settlement and the manner in
which it was reached for the following reasons, among others:

    * This Lead Plaintiff, AMS Fund, contends the proposed
      settlement was negotiated on an uninformed basis by class
      counsel as to the strength of the Class's claims against
      defendants and without input from all Court-appointed Lead
      Plaintiffs.  It has been claimed in Court papers that the
      actual damages suffered by Halliburton shareholders amounted
      to hundreds of millions to billions of dollars,
      significantly more than the de minimis proposed settlement.

    * The AMS Fund and its counsel were not consulted prior to
      Lead Counsel's agreement to the settlement.  After being
      presented with the proposed settlement as a fait accompli,
      the AMS Fund took it upon itself to undertake its own
      further investigation.  The result of this further
      investigation was that significant facts exist -- facts
      undeveloped by Lead Counsel and the other two Executive
      Committee firms -- which corroborate the Class's claims and
      illustrate the inadequacy of the proposed settlement to
      remedy defendants' alleged wrongs.

    * The proposed settlement does not fairly compensate the Class
      for the claims against defendants.  After deduction of class
      and derivative counsel's requested fees and realistically
      expected settlement administration and other expenses of
      approximately $3,000,000, Class members might receive
      something between $0.005 or $0.006 per share.

At a hearing, presently scheduled for August 26, 2004, the Court
will consider whether to finally approve the proposed settlement
as fair, just and reasonable.  At the August 26 hearing, any Class
member who has not requested exclusion from the Class may appear
in person or by counsel and be heard in opposition to the
fairness, reasonableness and adequacy of the proposed settlement,
among other things, including the allocation of settlement
proceeds and any award of attorney fees.  Scott + Scott will
assist any Class member in submitting its objections or in joining
others who will be objecting.  Class members may also consult the
settlement notice the Court ordered to be mailed to them for
further details concerning objection and opt-out procedures.  Any
interested party may contact attorney Neil Rothstein at
nrothstein@scott-scott.com.

Scott + Scott, LLC, a Connecticut-based law firm with offices in
Ohio and California, is a law firm with a national practice and
reputation.  Scott + Scott has dedicated itself to client
communication and satisfaction.  The firm is currently litigating
major securities, antitrust and employee retirement plan cases
throughout the United States and represents pension funds,
charities, foundations, individuals and other entities worldwide
in both class and non-class cases. Visit the Firm's Web site at
http://www.scott-scott.com/to learn more about Scott + Scott's
practice, this case and other cases.  The firm's office in
Connecticut is located at 108 Norwich Avenue, Colchester,
Connecticut, 06415.

Any member of the Class (i.e., Halliburton common stock purchasers
between May 18, 1998 and May 28, 2002) may join this Lead
Plaintiff and others in objecting to the proposed settlement -- a
settlement that results in an actual distribution of roughly a
half a cent per share to qualified class members -- contact
Scott + Scott no later than August 17, 2004 at 800/404-7770 or
860/537-3818 (EDT) or 800/332-2259 or 619/233-4565 (PDT).

Class members may also view the Scott + Scott's clients' most
recent filing with the Court at http://www.scott-scott.com/

The firm's fax is 619/233-0508.  Any Halliburton shareholder can
contact the firm for information regarding this situation.

Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries.  DII has no business
operations.  The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152).  Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP, represent the Debtors in their
restructuring efforts.


E*TRADE: Fitch Junks Preference Shares and Composite Securities
---------------------------------------------------------------
Fitch Ratings has taken these rating actions on classes of notes
issued by E*TRADE ABS CDO I, Ltd., as issuer, and E*TRADE ABS CDO
I, LLC, as co-issuer (together, E*TRADE I):

The following classes of notes have been affirmed:

   -- $111,530,993 class A-1 first priority senior secured
      floating-rate notes due 2017 'AAA';

   -- $50,000,000 class A-2 second priority senior secured
      floating-rate notes due 2032 'AAA'.

The following classes of notes have been downgraded and removed
from Rating Watch Negative:

   -- $25,000,000 class B third priority senior secured floating-
      rate notes due 2037 to 'A-' from 'AA+';

   -- $8,979,385 class C-1 mezzanine secured floating-rate notes
      due 2037 to 'B+' from 'BBB';

   -- $3,213,674 class C-2 mezzanine secured fixed-rate notes due
      2037 to 'B+' from 'BBB';

   -- $12,500,000 preference shares due 2037 to 'CCC-' from BBB-;

   -- $4,917,798 composite securities due 2037 to 'CCC-' from
      'BBB-'.

The transaction, a static cash flow collateralized debt obligation
(CDO), is supported by a diversified portfolio of asset-backed
securities (ABS), residential mortgage-backed securities (RMBS),
commercial mortgage-backed securities (CMBS), and CDOs.  Fitch has
had discussions with E*TRADE Global Asset Management, Inc., (rated
'CAM2' by Fitch), the collateral manager, regarding the current
state of the portfolio.  Fitch has reviewed the credit quality of
the individual assets comprising the portfolio and has conducted
cash flow modeling of various default timing and interest rate
stress scenarios.  As a result, Fitch has determined that the
original ratings assigned to the class B notes, class C-1 and C-2
notes (together, class C notes), preference shares and composite
securities no longer reflect the current risk to their respective
noteholders.

The rating actions are a result of deterioration in the credit
quality of E*TRADE I's collateral pool and the negative impact of
its interest rate hedge.  According to its June 30, 2004 trustee
report, 0.86% of the portfolio was defaulted per E*TRADE I's
governing documents.  As part of its analysis, Fitch identified an
additional 9.5% of the collateral pool whereby default is a real
possibility.  Fitch assigned recovery estimates to the defaulted
and distressed assets after discussions with the collateral
manager and Fitch RMBS analysts.  To the extent that expected
recovery estimates on these securities are not realized, Fitch may
take further action on E*TRADE I's rated notes.  Both the
defaulted and distressed assets represent exposures to the
manufactured housing sector.  These assets have contributed to a
decrease in E*TRADE I's overcollateralization (OC) levels.  As of
June 30, 2004, the class A/B OC test was passing at 107.23% and
the class C OC test was failing at 100.82% versus triggers of
105.5% and 102%, respectively.

Interest proceeds available to pay E*TRADE I's notes have
undergone stress largely attributable to an interest rate swap in
place to hedge the mismatch between fixed-rate collateral
(currently $67.1 million, excluding defaults) and floating-rate
liabilities (currently $208 million when including the preference
shares).  Because E*TRADE I is currently overhedged with a swap
($78.6 million notional; 5.17% strike rate) and in a low interest
rate environment, E*TRADE I continues to be negatively impacted.

The ratings on the class A-1 and A-2 notes (together, the class A
notes) and B notes address the timely payment of interest and
ultimate payment of principal, whereas the ratings on the class C
notes address the ultimate payment of interest and principal.  The
rating on the preference shares addresses the ultimate payment of
the initial preference share rated balance and the ultimate
receipt of payments that result in a yield on the preference share
rated balance equivalent to 2% per annum.  The rating on the
composite securities addresses the ultimate payment of the initial
composite securities rated balance and the ultimate receipt of
payments that result in a yield on the composite securities rated
balance equivalent to 4.66% per annum.


ELANTIC TELECOM: Wants More Time to Assume or Reject Leases
-----------------------------------------------------------
Elantic Telecom, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Virginia, for more time to decide whether to
assume, assume and assign, or reject its unexpired nonresidential
real property leases.

The Debtor tells the Court that lease-related decisions play a
crucial role in its reorganization process.  The Company wants to
avoid making unwise rejections of valuable leases or assume
undesirable ones.

The Debtor relates that an extension until March 16, 2005, is
necessary to allow the Company to fulfill its obligations as a
debtor-in-possession while attending to its administrative
obligations imposed by the Bankruptcy Code.

Headquartered in Richmond, Virginia, Elantic Telecom, Inc. --
http://www.elantictelecom.com/-- provides wholesale fiber
bandwidth and carrier services to long-distance, international
wireless carriers and competitive local exchange carriers across
its fiber optic network.  The Company filed for chapter 11
protection on July 19, 2004 (Bankr. E.D. Va. Case No. 04-36897).
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $19,844,000 in total assets and $24,372,000 in total debts.


ELANTIC TELECOM: Gets Nod to Use Cash Collateral Through Aug. 18
----------------------------------------------------------------
Elantic Telecom, Inc., secured authority from the U.S. Bankruptcy
Court for the Eastern District of Virginia, Richmond Division, to
dip into its lenders' cash collateral through August 18, 2004.

The Court has determined that the Debtor will suffer immediate and
irreparable harm if not granted authority to use the cash
collateral to finance its ongoing business operations.

Elantic owes $300,000 under the Pre-Petition Loan Agreement with
M/C Venture Partners IV, L.P., M/C Venture Partners V, L.P., M/C
Venture Investors L.L.C., Chestnut Venture Partners, L.P., Banc of
America Capital Investors SBIC, L.P. and BB&T Capital Partners.

In order to secure the Debtor's obligations under the Prepetition
Loan Agreement, the Prepetition Secured Lenders are granted first
priority security interest in all of Elantic's personal property,
including, but not limited to, its furniture, receivables,
contract rights and irrevocable rights of use all other rights of
the Debtor, including tax refunds, insurance proceeds, files and
records, goods, securities, chattel paper, deposits, cash or other
property owned by the Debtor that is in the possession of the
Prepetition Secured Lenders, general intangibles, intellectual
property rights, inventory, machinery and equipment, and any other
property of the Debtor that is in the possession of the
Prepetition Secured Lenders.

Under the Loan Documents, the Prepetition Secured Lenders have a
duly perfected, first priority lien in the Collateral.  The
Prepetition Secured Lenders have consented to the Debtor's use of
the Prepetition Cash Collateral according to this Weekly Budget:

                       7/24     7/31       8/07     8/14
                       ----     ----       ----     ----
  Cash Expenditures  611,759  1,342,668  460,396  470,646

The Secured Lenders are entitled to adequate protection of their
interest in the Collateral from any diminution in value resulting
from the use, sale or lease or imposition of the automatic stay.
The Secured Lenders are deemed to possess a valid, first priority,
properly perfected, non-avoidable security interest in the
Collateral to secure the Debtor's obligations under the Loan
Documents.

Headquartered in Richmond, Virginia, Elantic Telecom, Inc. --
http://www.elantictelecom.com/-- provides wholesale fiber
bandwidth and carrier services to long-distance, international
wireless carriers and competitive local exchange carriers across
its fiber optic network.  The Company filed for chapter 11
protection (Bankr. E.D. Va. Case No. 04-36897) on July 19, 2004.
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$19,844,000 in assets and $24,372,000 in liabilities.


ENDLESS ENERGY: Closes Plan of Arrangement & Gets $16.6M Financing
------------------------------------------------------------------
Endless Energy Corp. completed its previously announced Plan of
Arrangement.  Pursuant to the Plan of Arrangement, the Company has
changed its name to Marauder Resources East Coast Inc. and now
holds a 50% working interest in the Balmoral block gas exploratory
play and a 50% working interest in oil rights for the Panuke,
CoHasset and Balmoral blocks offshore Nova Scotia.

The Company also concluded a $16.625 million flow-through common
share financing led by Dundee Securities Corporation and including
Loewen & Partners Corporate Services Inc. at a price of $1.90 per
share.  The shares issued under the financing have a 4-month hold
period.  Under the terms of an over-allotment option granted to
the Agents, closing for up to an additional 2,631,759 flow-through
common shares (up to $5.0 million) may be made in the period
ending September 9, 2004.  The Agents were issued 612,500 broker
warrants, which are exercisable at $1.90 per share until August 9,
2006.

The Company estimates that $15.0 million of capital will be
required for drilling and an additional $5.0 to $10.0 million,
depending on whether 1 or 2 production tests are conducted to
production test and evaluate targeted horizons, for our first
offshore well.

Our first well is to be drilled in shallow waters (100 feet) to a
target depth of approximately 3,700 meters.  This well is
targeting natural gas in the Abenaki Jurassic reef and potential
in up-hole cretaceous oil sands.

Shares will commence trading under the name "Marauder Resources
East Coast Inc." (trading symbol MES) on the TSX Venture Exchange
at a later date, to be announced.  Letters of transmittal were
forwarded to shareholders with the materials for the Special
Meeting of Shareholders and additional letters of transmittal will
be sent to all shareholders.


ENRON CORPORATION: Appaloosa & Angelo Gordon Appealing 16 Orders
----------------------------------------------------------------
Appaloosa Management, LP, and Angelo, Gordon & Co., LP, inform the
United States Bankruptcy Court for the Southern District of New
York that, pursuant to Section 158 of the Judiciary Code, they
will take an appeal to the United States District Court for the
Southern District of New York concerning Judge Gonzalez's orders:

    (a) approving the Debtors' Disclosure Statement for the Fifth
        Amended Joint Plan;

    (b) approving the Stipulation temporarily allowing Bank of
        Tokyo-Mitsubishi, Ltd.'s Claims for voting purposes;

    (c) approving the Stipulation temporarily allowing certain
        claims of AEP Energy Services Gas Holding Company and
        Houston Pipeline Company, LP, for voting purposes;

    (d) approving the Stipulation temporarily allowing AEP Energy
        Services, Inc.'s Claims for voting purposes;

    (e) approving the Stipulation temporarily allowing Deutsche
        Trustee Company Limited's Claims;

    (f) approving the Stipulation temporarily allowing claims
        relating to ETOL;

    (g) approving the Stipulation temporarily allowing the claims
        filed by Barclays Bank PLC;

    (h) approving the Stipulation temporarily allowing Toronto
        Dominion (Texas), Inc.'s Claims for voting purposes;

    (i) approving the Stipulation temporarily allowing claims
        relating to the E-Next Financing Transaction;

    (j) approving the Stipulation temporarily allowing the Claims
        filed by J. Aron & Company and European Power Source
        Company (UK) Limited for voting purposes;

    (k) approving the Stipulation temporarily allowing Reliant
        Claims for voting purposes;

    (l) approving the Stipulation regarding treatment of Credit
        Lyonnais S.A. Claims for voting purposes;

    (m) approving the withdrawal of The Baupost Group and The
        Racepoint Group's Confirmation Objections;

    (n) denying the Motion in Limine filed by Appaloosa and
        Angelo, and Joinder by the Ad Hoc Committee of
        Yosemite/CLN Noteholders;

    (o) confirming the Modified Fifth Amended Plan; and

    (p) approving the Stipulation temporarily allowing for voting
        purposes the claims filed by the EDO Creditors, Members of
        the Vanguard Group and Bear Stearns & Company, Inc.

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.  The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No.: 01-
16033) Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FAIRCHILD SEMI: Further Reduces Bank Debt Interest Expense
----------------------------------------------------------
Fairchild Semiconductor International, Inc. (NYSE: FCS) reported
the successful refinancing of its term B bank loan of
approximately $298 million under its senior credit facility.  The
refinancing reduces the interest rate on all of the company's
current borrowings under the credit facility by 25 basis points to
the new rate approximating LIBOR plus 225 basis points.

"Our strong business performance and improving balance sheet
enabled us to again reduce our borrowing costs," stated Matt
Towse, senior vice president and CFO of Fairchild.  "As we
continue to build our leadership position as The Power
Franchise(R), we have increased our mix of higher margin, more
stable power products, reduced manufacturing costs and grown our
worldwide position, especially in Asia, the fastest growing
region. Our business model has enabled Fairchild to deliver 23
straight quarters of positive operating cash flow.  We remain
committed to reducing interest expense and improving earnings,
while leveraging the high growth opportunity in power
semiconductors for industry leading electronics applications."

An amendment to the company's credit agreement reflecting the
change will be filed with the SEC as an exhibit to Form 8-K.

                 About Fairchild Semiconductor

Fairchild Semiconductor (NYSE: FCS) --
http://www.fairchildsemi.com/-- supplies high performance power
products critical to today's leading electronic applications in
the computing, communications, consumer, industrial and automotive
segments.  As The Power Franchise(R), Fairchild offers the
industry's broadest portfolio of components that optimize system
power through minimization, conversion, management and
distribution functions.  Fairchild's 9,000 employees design,
manufacture and market power, analog & mixed signal, interface,
logic, and optoelectronics products from its headquarters in South
Portland, Maine, USA and numerous locations around the world.

                         *     *     *

                        Business Risks

In its Form 10-K for the fiscal year ended December 28, 2003,
filed with the Securities and Exchange Commission, Fairchild
Semiconductor International Inc. reports:

"Our historical financial results have been, and our future
financial results are anticipated to be, subject to substantial
fluctuations.  We cannot assure you that our business will
generate sufficient cash flow from operations, that currently
anticipated cost savings and operating improvements will be
realized on schedule or at all, or that future borrowings will be
available to us under our senior credit facility in an amount
sufficient to enable us to pay our indebtedness or to fund our
other liquidity needs.  In addition, because our senior credit
facility has variable interest rates, the cost of those borrowings
will increase if market interest rates increase.  If we are unable
to meet our expenses and debt obligations, we may need to
refinance all or a portion of our indebtedness on or before
maturity, sell assets or raise equity.  We cannot assure you that
we would be able to refinance any of our indebtedness, sell assets
or raise equity on commercially reasonable terms or at all, which
could cause us to default on our obligations and impair our
liquidity. Restrictions imposed by the credit agreement relating
to our senior credit facility and the indenture governing
Fairchild Semiconductor Corporation's 10-1/2% Senior Subordinated
Notes restrict or prohibit our ability to engage in or enter into
some business operating and financing arrangements, which could
adversely affect our ability to take advantage of potentially
profitable business opportunities."

Moody's Investor Services, Inc., rates the 10-1/2% Senior
Subordinated Notes at B2.  Standard & Poor's and Fitch Ratings
give their single-B ratings to the 10-1/2% Notes.


FLEMING COMPANIES: Asks to Court to Approve Massara Settlement
--------------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Fleming Companies, Inc. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware to
approve their settlement agreement with Carl J. Massara and Judy
Massara.

Ira D. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, PC, in Wilmington, Delaware, relates that Fleming
Companies, Inc., supplied groceries to the Massara Corporation.
The Massaras executed an Unlimited Guaranty to guarantee Massara
Corp.'s debts.  On November 26, 2002, Massara Corp. filed for
Chapter 11 protection in the United States Bankruptcy Court for
the Northern District of Ohio. Massara Corp. owed the Debtors
$89,813 in unpaid accounts receivable.

On February 14, 2003, Fleming sued the Massaras in the Court of
Common Pleas, Stark County, Ohio, seeking to enforce the
Guaranty.

Mr. Kharasch reports that the parties agreed to resolve the
Massara Suit and all outstanding amounts owing to the Debtors.
Specifically, the parties agree that:

    (a) the Massaras will pay the Debtors $79,500; and

    (b) the parties grant each other a general release from all
        claims or causes of action arising under or in connection
        with the Debtors' cases or any of the parties' business
        dealings.

Mr. Kharasch notes that with the settlement, the Debtors are able
to receive over 88% of the outstanding accounts receivable. This
will result in a benefit to the Debtors' estates that is roughly
equal to the maximum recovery they could achieve in the Massara
Suit, without incurring the costs of litigation.

Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States.  The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945).  Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 41; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FREESTAR TECHNOLOGY: Terminates TransAxis Stock Purchase Agreement
------------------------------------------------------------------
On September 24, 2003, FreeStar Technology Corporation entered
into a stock purchase agreement with certain shareholders of
TransAxis, Inc. (formerly Digital Courier Technologies, Inc.) for
the acquisition of a majority of the common stock of this publicly
held company.  The terms of the acquisition provide for FreeStar
to purchase a majority of the shares that consist of the
following:

   (a) the 2,916,533 shares that will be outstanding upon the
       conversion of certain debt of TransAxis; and

   (b) the 805,000 shares of FreeStar common stock issued and
       outstanding.

In exchange FreeStar is to issue on a pro rata basis based on the
sellers' current percentage beneficial ownership of TransAxis
common stock (including the beneficial ownership of the TransAxis
common stock represented by the Conversion Right) the aggregate
number of shares of FreeStar common stock, which is the greater
of:

    (i) 7,000,000 shares of common stock; or

   (ii) that number of shares of common stock equal to $1,260,000
        divided by the average closing bid price per share of the
        common stock on the five days prior to the closing date.

On October 8, 2003, the parties amended the TA Acquisition
Agreement.  The following was amended under this document:

    (a) The Registration Rights Agreement (Exhibit B to the
        agreement) was amended so that FreeStar is to use
        commercially reasonable efforts to cause a Form SB-2
        registration statement covering re-sales of all of the
        shares of its common stock to be issued to or on behalf of
        the Sellers at the closing to be filed with the SEC within
        180 days after the closing.  Thereafter, FreeStar is to
        use commercially reasonable efforts to have this
        registration statement declared effective as promptly as
        possible, and to keep this registration statement
        effective until the earlier of:

         (i) one year following the effectiveness date; or

        (ii) that date on which all of the common stock covered by
             the registration statement may be resold without
             further restriction pursuant to Rule 144 under the
             Securities Act of 1933.

     (b) The parties to the agreement concur that the original
         amount of FreeStar common stock to be issued in
         connection with the TA Acquisition Agreement is
         31,500,000 shares, but that due to a certain liability of
         TransAxis, the total amount of common stock to be issued
         by FreeStar is reduced to 25,312,053.  In addition, due
         to a missing stock certificate of FreeStar, the Company
         will be required to deliver a further reduced total of
         25,183,418 shares of common stock at the closing, with
         the remaining 128,585 shares only upon delivery to
         FreeStar of the missing stock certificate.

On February 20, 2004, the parties further amended the TA
Acquisition Agreement -- Amendment No. 2.  FreeStar claimed that
it had identified certain accounting-related deficiencies in the
books of TransAxis which predate the closing date, and that such
deficiencies have and will continue to preclude TransAxis from
being able to obtain audited financial statements without undue
effort and expense.  In order to avoid the cost of litigation and
further disputes and negotiation, FreeStar and TransAxis agreed to
reduce the number of shares issuable under the TA Acquisition
Agreement from 25,183,418 to 3,200,000, which were actually
issued.  In exchange, FreeStar actually received 350,900 shares of
TransAxis stock, or 43.5%, although it remains entitled to receive
the lost shares.  FreeStart never exercised the Conversion Right,
and never controlled a majority of the shares of TransAxis.

After extensive discussions and following the unanimous
determination of FreeStar's Board of Directors, the Company has
terminated the TA Agreement as of June 17, 2004.  This decision
was based on both TransAxis' and the sellers' failure to disclose
material liabilities and contingencies in connection with that
company, as well as their failure to comply with their obligations
under the agreement.  FreeStar believes that it will recover the
3,200,000 shares issued under the TA Acquisition Agreement.

                    About Freestar Technology

Headquartered in Santo Domingo, Dominican Republic, FreeStar
Technology is an international payment processing and technology
company operating a robust Northern European BASE24 credit card
processing platform based in Helsinki, Finland. FreeStar currently
processes approximately 1,000,000 card payments per month for an
established client base that comprises companies such as Finnair,
Ikea and Stockman. FreeStar is focused on exploiting a first-to-
market advantage for its Enhanced Transactional Secure Software
(ETSS), which is a software package that empowers consumers to
consummate e-commerce transactions with a high level of security
using credit, debit, ATM (with PIN) or smart cards. The company
maintains satellites offices in Dublin, Ireland; Helsinki,
Finland; Stockholm, Sweden, and Santo Domingo, Dominican Republic.
For more information, visit FreeStar Technology's Web sites at
http://www.freestartech.com/and http://www.rahaxi.com/

                      Going Concern Doubts

As reported in the Troubled Company Reporter's May 3, 2004,
edition, Freestar Technology Corporation's auditors at Stonefield
Josephson, Inc., expressed substantial doubt about the Company's
ability to continue as a going concern when they reviewed the
Company's financial statements for the year ending June 30, 2003.



FREESTAR TECHNOLOGY: Terminates Unipay Asset Purchase Agreement
---------------------------------------------------------------
On May 4, 2004, FreeStar Technology Corporations entered into an
Asset Purchase Agreement with Unipay, Inc., (the Seller), and
Unicomp, Inc., a Colorado corporation and sole shareholder of
Unipay.  The Seller, among other operations, provides or acts as
an electronic gateway between sellers of goods and services and
processors of payments for those goods and services made via
credit cards and debit cards, presently located at the Seller's
facility in Murphy, North Carolina.  Under the terms of the
Agreement, FreeStar agreed to purchase all of the Seller's assets
and properties used in connection with the operation of this
business, with no assumption of liabilities.  The terms of the
Agreement: the Company was obligated to pay the purchase price for
these assets, which is the sum of:

   (a) $150,000, which was to be paid to the Seller on or before
       July 1, 2004; and

   (b) 10,000,000 restricted shares of FreeStar's common stock,
       which have an agreed upon value of $1,000,000.

On June 14, 2004, FreeStar informed the Seller and the Stockholder
that due to the failures of these parties to perform as required
under the Agreement, including blocking access to the North
Carolina premises, preventing transfer of assets, and failing to
deliver business and other documents, the purchase transaction is
terminated.  FreeStar paid $25,000 in connection with the
Agreement and issued the 10,000,000 restricted shares; the Company
expects to recover the 10,000,000 shares and will cancel them upon
receipt.

                    About Freestar Technology

Headquartered in Santo Domingo, Dominican Republic, FreeStar
Technology is an international payment processing and technology
company operating a robust Northern European BASE24 credit card
processing platform based in Helsinki, Finland. FreeStar currently
processes approximately 1,000,000 card payments per month for an
established client base that comprises companies such as Finnair,
Ikea and Stockman. FreeStar is focused on exploiting a first-to-
market advantage for its Enhanced Transactional Secure Software
(ETSS), which is a software package that empowers consumers to
consummate e-commerce transactions with a high level of security
using credit, debit, ATM (with PIN) or smart cards. The company
maintains satellites offices in Dublin, Ireland; Helsinki,
Finland; Stockholm, Sweden, and Santo Domingo, Dominican Republic.
For more information, visit FreeStar Technology's Web sites at
http://www.freestartech.com/and http://www.rahaxi.com/

                      Going Concern Doubts

As reported in the Troubled Company Reporter's May 3, 2004,
edition, Freestar Technology Corporation's auditors at Stonefield
Josephson, Inc., expressed substantial doubt about the Company's
ability to continue as a going concern when they reviewed the
Company's financial statements for the year ending June 30, 2003.


FUN-4-ALL: Creditors Committee Taps Douglas J. Pick as Counsel
--------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Fun-4-All
Corp.'s chapter 11 case sought and obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Douglas J. Pick, Esq., as its counsel.

Mr. Pick will:

    a) advise the Committee with respect to its rights, duties
       and powers in this case;

    b) assist and advise the Committee in its consultations with
       the Debtor relative to the administration of this case;

    c) assist the Committee in analyzing the claims of the
       Debtor's creditors and in negotiating with such
       creditors;

    d) assist with the Committee's investigation of the acts,
       conduct, assets, liabilities and financial condition of
       the Debtor, the operation of the Debtor's business and
       the proposed sale thereof;

    e) assist the Committee in its analysis of and negotiations
       with the Debtor or any third-party concerning matters
       related to the realization by creditors of a recovery on
       claims and other means of realizing value in these cases;

    f) review with the Committee whether a plan of
       reorganization should be filed by the Committee or some
       other third-party and, if necessary, draft a plan and
       disclosure statement;

    g) assist the Committee with respect to consideration by the
       Court of any disclosure statement or plan prepared or
       filed pursuant to Section 1125 or 1121 of the Bankruptcy
       Code;

    h) assist and advise the Committee with regard to its
       communications to the general creditor body regarding the
       Committee's recommendations on any proposed plan of
       reorganization or other significant matters in this case;

    i) represent the Committee at all hearings and other
       proceedings;

    j) assist the Committee in its analysis of matters relating
       to the legal rights and obligations of the Debtor in
       respect of various agreements and applicable laws;

    k) review and analyze all applications, orders, statements
       of operations and schedules filed with the Court and
       advise the Committee as to their propriety;

    l) assist the Committee in preparing pleadings and
       applications as may be necessary in furtherance of the
       Committee's interests and objectives; and

    m) perform such other legal services as may be required
       and/or deemed to be in the interest of the Committee in
       accordance with its powers and duties as set forth in the
       Bankruptcy Code.

Mr. Pick will bill the Debtor's estate his current rate of $325
per hour. Other professionals may provide services to the
Committee at their current hourly rates:

            Position                Billing Rate
            --------                ------------
            Partners                $325
            Associates               200 to  225
            Paralegals and Clerks    95  to  105

Headquartered in New York, New York, Fun-4-All Corp.,
manufactures, sells and distributes toys under various licenses.
The Company filed for chapter 11 protection on June 8, 2004
(Bankr. S.D.N.Y. Case No. 04-13943).  Steven H. Newman, Esq., at
Esanu Katsky Korins & Siger, LLP represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $4,554,659 in total assets and $9,856,993
in total debts.  The Company's Chapter 11 Reorganization Plan and
Disclosure Statement are due by October 6, 2004.


GENTEK INC: Trust Asks Court to Approve Mediation Procedures
------------------------------------------------------------
GenTek, Inc.'s reorganization plan provides for the creation of a
Preference Claim Litigation Trust primarily for prosecuting
preference rights for beneficiaries.  Pursuant to the Litigation
Trust, Jack B. Fishman was designated as preference claim
administrator.  Mr. Fishman retained Novare, Inc., to assist in
administrating the Litigation Trust's business.

Mr. Fishman is in the process of recovering Reorganized GenTek's
property to satisfy claims, and has pursued preferential transfers
through direct contact and negotiations with various
preference recipients.

To date, Mr. Fishman has filed 197 adversary proceedings against
various trade entities to recover transfers that are avoidable or
recoverable under Sections 544, 547, 548, 550, or 553 of the
Bankruptcy Code.  Additional Adversary Proceedings will be filed
in stages.  Mr. Fishman believes that he ultimately may file as
many as 800 Adversary Proceedings.  The deadline for filing the
Adversary Proceedings is October 11, 2004.

                  Proposed Mediation Procedures

Rachel Lowy Werkheiser, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, PC, in Wilmington, Delaware, relates that if
Mr. Fishman is unable to settle an Adversary Proceeding then he
will serve on the applicable defendant, a notice that the
Adversary Proceeding is referred to mandatory mediation.  Mr.
Fishman will make the mediation demand no later than 90 days after
a response by the defendant.

The Mediation Demand will identify the mediator chosen by Mr.
Fishman from the then current Register of Mediators and
Arbitrators pursuant to Rule 9019-4 of the Local Rules of
Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for
the District of Delaware.  The Mediation Demand will provide the
name, address, and telephone number of the chosen Mediator, and
will be served on the chosen Mediator as well.

Within 10 days of the Mediation Demand, the Mediator will send a
written notice scheduling the mediation to Mr. Fishman and the
adversary defendants and their counsel, if known to Mr. Fishman.
The Mediation Notice will:

   (a) identify the manner in which to communicate with the
       Mediator;

   (b) schedule the exchange of documents, identification of
       witnesses, and other evidence that will summarize the
       positions of each party, which will be required to be
       submitted within 10 days after service of the Mediation
       Notice;

   (c) identify the format of and the procedure to be employed
       during the mediation;

   (d) describe who should attend;

   (e) identify the location of the mediation; and

   (f) describe the effect of a mediated settlement.

The Mediation Notice will provide for a mediation date within 30
to 40 days from the date of the Mediation Notice.  The mediation
will take place in Chicago, Illinois.

According to Ms. Werkheiser, the choice of a single location for
the mediation will greatly expedite the resolution of the matters.
Mr. Fishman proposes to hold eight matters per day, with mediation
scheduled for two-day sessions, occurring once to thrice per
month.  A single location should also significantly reduce the
cost of the mediator's fees and travel costs.

After reviewing the preference defendants' locations, the Trustee
determined that Chicago is a fair location for the mediations, as
it is centrally located for all parties.  Furthermore, as Mr.
Fishman is located in Chicago, and must attend each of the
Mediations, the financial burden on the Litigation Trust will be
significantly reduced if Mr. Fishman is permitted to avoid
mediation in several different locations.

A defendant, nevertheless, may demonstrate that mediation in
Chicago is unfairly burdensome.  The defendant may request, by
formal notice to Mr. Fishman and the Mediator, that mediation be
scheduled in Wilmington, Delaware or via telephone appearance.
Mr. Fishman reserves his rights to object to the proposed change
in mediation location, and to ask that the defendant bear a
portion of the costs associated with the change of venue.  If Mr.
Fishman and the defendant are unable to agree on the location of
the mediation or the apportionment of costs, then if necessary,
Mr. Fishman will file a notice within 10 days requesting the
Court to schedule a telephonic hearing to resolve the dispute.

Pursuant to the Preference Claim Litigation Trust Agreement, if a
settlement is reached at mediation, then the parties will enter
into a settlement agreement.  No further action from the Court
will be necessary and Mr. Fishman will dismiss the Adversary
Proceeding with prejudice upon payment of the settlement amount,
if any, within 30 days of the receipt of the payment.

If mediation is not successful, then the Mediator will file a
notice with the Court, served on all parties to the Adversary
Proceeding.  After receipt of an Unsuccessful Meditation Notice,
the Court will set a trial scheduling conference for the
Adversary Proceeding.

At least 16 defendants object to the request of Jack B. Fishman,
as Trustee for the GenTek Preference Claim Litigation Trust, for
mediation of adversary proceedings:

    * ESCO, LLC,
    * Fourslide Spring and Stamping, Incorporated,
    * Gateway Controls, Inc.,
    * Hei-Tek Automation, Inc.,
    * Jensen Fabricating Engineers, Incorporated,
    * Main's Fabrication, LLC,
    * Martin G. Imbach, Inc.,
    * McElroy, Deutsch, Mulvaney & Carpenter, LLP,
    * Pallet and Container Corporation of America, Inc.,
    * Sandvik Steel, Inc.,
    * Sapp Landscape,
    * SBC Communications,
    * Superior Welding and Boiler Repair, Inc.,
    * Vaughn Industries, LLC
    * Support Terminals Operating Partnership, LP, and
    * Metric Punch Co.

A. Location of the Mediation/Appearances

At least 11 defendants object to Chicago, Illinois as the location
for mediations.  ESCO complains that the unilateral choice of the
location violates the mandatory mediation rules for preference
actions established by the Court on April 7, 2004.  In their joint
objection, Sandvik Steel, Fourslide Spring, Vaughn Industries,
Main's Fabrication, and Pallet argue that while Chicago may be
most convenient to Mr. Fishman, the location is clearly contrary
to Rules 9019-3 and 9019-4 of the Local Rules of Bankruptcy
Practice and Procedure of the U.S. Bankruptcy Court for the
District of Delaware, and is extremely unfair to the defendants.
Rule 9019-3(c)(i) provides that a mediator will schedule a
convenient time and place for the mediation conference.

The defendants also note that there are presently 17 mediators
listed in the Register of Mediators and Arbitrators.  Of the 17
mediators, six are employed in Delaware, two are employed in
Maryland, and 12 are employed in other states substantially closer
to Delaware than Illinois.  Having all the mediations take place
in Chicago will increase the costs of the mediator's fees and
travel costs.

According to Jensen Fabricating, Mr. Fishman should not be
permitted to drag the defendants to a distant forum. Jensen
Fabricating had reasonably assumed that the litigation would occur
in Delaware when it retained a Delaware counsel to defend it.
Jensen Fabricating doesn't want to be strapped with the expense of
travel merely because others may be located near Chicago.

Imbach, Inc., believes that it would be far less expensive and
less of an inconvenience for Mr. Fishman and the mediators to
travel to Delaware for the purpose of conducting a series of
mediations than to force numerous small preference defendants and
their counsel to travel to Chicago to attend mediations there.

Superior Welding, Sapp Landscape, Gateway Controls, SBC
Communications, and McElroy Deutsch also prefer to hold the
mediation conference in Delaware.

B. Cost of Mediation

Superior Welding and Sapp Landscape contend that the April 7
Order does not permit the shifting of mediation fees and costs to
the defendant.  Mr. Fishman or the bankruptcy estate should pay
the fees and costs.

ESCO also objects to Mr. Fishman's attempt to deflect the
mediation fees.  ESCO asks the Court to compel Mr. Fishman to
adhere to the April 7 Order.

Additionally, SBC Communications states that in fairness and
logic, requiring Mr. Fishman -- as only one of three primary
mediation participants -- to either (i) travel to mediation
conferences or (ii) arrange his own telephonic or video
participation on a case-by-case basis would be more sensible,
least burdensome and less expensive procedure for both the estate
and mediation participants.

Jensen Fabricating is based in Connecticut and its counsel is
located in Wilmington, Delaware.  Jensen Fabrication tells Judge
Walrath that Mr. Fishman is using Chicago to attempt to gain the
upper hand in negotiations.  Jensen Fabricating explains that if
the defendant does not agree to settle on his terms, Mr. Fishman
can simply add to the defendant's costs by proceeding to mediation
in his hometown.

Jensen Fabricating also notes that the reason given by Mr.
Fishman for the selection of the mediation location is that the
Preference Claim Litigation Trust does not have much money and
Mr. Fishman is located in Chicago.  The defendants had no say in
the selection of Mr. Fishman as the Trustee. If the parties to the
Litigation Trust were concerned about the expense, they certainly
could have selected a trustee who was located closer to
Delaware.  They chose not to and the burden of that choice should
not be placed on the defendants' backs, Jensen Fabricating
asserts.

Sandvik Steel, Fourslide Spring, Vaughn Industries, Main's
Fabrication, and Pallet maintain that since most of the
Registered Mediators are employed in Delaware or in other states
closer to Delaware than Illinois, the Chicago location will
increase the mediation cost to all parties concerned, including
Mr. Fishman.

C. Identity of Mediator

ESCO, Superior Welding, Sapp Landscape, Sandvik Steel, Fourslide
Spring, Vaughn Industries, Main's Fabrication, Pallet, McElroy
Deutsch, and Imbach, Inc., contend that the selection of the
mediators should be in accordance with the April 7 Order, which
provides that if the parties cannot agree on the choice of
mediator, the Court -- and not Mr. Fishman -- appoints the
mediator, or the process should require a mutual agreement by the
parties on a mediator selected from the Registered Mediators
pursuant to Rule 9019-4.  Mr. Fishman should not have sole
discretion in selecting a mediator.

Jensen Fabricating asserts that if the mediation process is to
have a chance of success, then both parties need to have input
into the selection of a mediator.  If Mr. Fishman is willing to
limit the pool of mediators to the list of Registered Mediators,
then the defendants should be able to select a mediator from that
pool.

D. Scheduling of Mediations

The defendants find Mr. Fishman's demand that the mediation
proceedings take place, solely for his convenience, outside of the
environs of Wilmington, unfair and unreasonably burdensome on
their part.

Imbach, Inc., explains that inasmuch as the Debtors chose to file
their Chapter 11 case in Delaware, the Debtors have elected their
forum of choice -- Delaware.  At a minimum, each of the preference
defendants should be give the option to choose whether to mediate
in Chicago or Delaware.  It would be far less expensive and less
of an inconvenience for Mr. Fishman and the mediator to travel to
Delaware for conducting a series of mediations than to force
numerous small preference defendants and their counsel to travel
to Chicago to attend mediations there.

SBC Communications contends that, contrary to Mr. Fishman's
notion, the burden, if any, of participating in mediation
proceedings in Delaware should rest on the Trustee.  Furthermore,
Mr. Fishman should have the responsibility of demonstrating
hardship to be allowed by the Court on a case-by-case basis to
appear at mediation proceedings via telephonic or video
conference.  The burden should not be placed on the defendants who
already bear the onus of litigating in a forum outside of their
normal base of operations.

Sandvik Steel, et al., reminds Judge Walrath that in In re
Grossman's Inc., 1997 WL 33446688 (Bankr. D. Del. 1997), the
Delaware Court "authorized mediation procedures, including that
mediation shall occur at a place agreed to by the parties."
Moreover, Sandvik Steel, et al., notes that pursuant to Rule
9019-3(c)(i), the mediator must schedule a convenient time and
place for the mediation conference.

E. Stay of Discovery

ESCO oppose Mr. Fishman's attempt to stay formal discovery --
other than expert discovery.  The Court's mediation procedures
provide that a discovery planning conference pursuant to Rule
26(f) of the Federal Rules of Civil Procedure, made applicable by
Rule 7026 of the Federal Rules of Bankruptcy Procedure, will
occur. Furthermore, the April 7 Order states that initial
disclosures under Rule 26(a)(1) are to be made subsequent to the
discovery planning conference.  The April 7 Order adds that
"[a]ny extension of the deadline to provide initial disclosures
must be by order of the court, and will only be granted for cause.

The exchange of fact discovery before the mandatory mediation is
essential to:

    (a) ensure that the mediation is meaningful; and

    (b) create an atmosphere conducive to settlement.

ESCO also states that the factual information derived from the
initial disclosures and further paper discovery would assist both
Mr. Fishman and ESCO, and provide the basis for their individual
analyses upon which their mediation positions will necessarily
rely.  The meaningful exchange that takes place during the initial
fact discovery phrase may move the parties toward an agreed
settlement without the need for mediation at all.  ESCO adds that
meaningful mediation would be greatly assisted by the exchange of
the preference analyses by the parties in advance of the
mediation.

McElroy Deutsch concurs with a stay of formal discovery during any
mediation process to be imposed by the Court, but suggests that
the parties be required to show good faith in responding to
reasonable requests from each side consonant with a settlement
process.

Gateway Controls does not object to the stay of discovery pending
mediation, but is fully aware that the Court does not favor a stay
of discovery.  Gateway Controls defers to the Court's preference
regarding the issue of a stay of discovery.

Similarly, Superior Welding and Sapp Landscape agree to the
limited stay of formal discovery from the service date of the
Mediation Demand through the service date of the Unsuccessful
Mediation Notice, absent leave granted by the mediator or written
motion served by the party requesting discovery.

                        Additional Concerns

The defendants also express concern over the proposal that the
mediator set the mediation date.  The defendants suggest that the
mediator should have the discretion to reasonably accommodate a
defendant's written concerns that the scheduled date is
inconvenient.  The mediator will likely then require the
defendants to appear on the next scheduled date for mediation.

Hei-Tek Automation denies receiving preferential transfers from
the Debtors.  Hei-Tek explains that the $4,429 payment it received
before the Petition Date was for new value provided to the
Debtors.  "Terms of these transactions were disclosed at the time
of orders received from Noma Electric and Noma clearly indicated
the acceptance to the net 30 terms set forth by [Hei-Tek]," Daniel
M. Heiling, President and CEO of Hei-Tek, tells the Court.

                      Trustee's Omnibus Reply

To address the issues raised by the defendants, Jack B. Fishman,
the Trustee for the GenTek Preference Claim Litigation Trust,
proposes to the modify the request to reflect these changes:

A. Location of the Mediation/Appearances

While all mediations will be scheduled to take place in Chicago,
Illinois, the adversary defendant may, within 10 days after
receiving the Mediation Demand, send a written request to Mr.
Fishman and his counsel requesting that the mediation take place
in Wilmington, Delaware.  If an Opt-Out Request is made, the
mediation will be held in Wilmington.

With regards the prospect of appearance at the mediation by
telephone, Mr. Fishman would support a ruling that gives the
mediator the discretion to allow an adversary defendant to appear
telephonically, based on written request and reasons submitted by
the defendant.

B. Cost of Mediation

To avoid any confusion, the Trust will pay all of the mediator's
fees associated with the mediation regardless of whether the
mediation is held in Chicago or Wilmington, including the
mediator's hourly fees and any travel expenses incurred by the
mediator.  This is consistent with the provisions of the Court's
April 7 General Order.

C. Identity of the Mediator

Mr. Fishman agrees that the prior selection of a small number of
available mediators will greatly enhance the effectiveness and
efficiency of the mediations.  The mediators will be able to learn
the general background of the Debtors' businesses and payment
practices, thus greatly reducing the time that the mediation will
require to prepare for and complete the mediation.  Moreover, as
Mr. Fishman has proposed an aggressive schedule of mediations to
get the matters resolved in the near term, the selection of a
small number of mediators, who are familiar with the issues and
involved in the master scheduling, will facilitate the process.

Mr. Fishman asks the Court to appoint Lester J. Levy, Esq., and
Howard N. Gorney, Esq., as mediators. Mr. Fishman believes that
Messrs. Levy and Gorney are well qualified to mediate the actions.

Mr. Levy is the managing director of JAMS bankruptcy practice.
He has mediated hundreds of bankruptcy matters and is the chair of
the ADR Committee for the American Bankruptcy Institute.  Mr.
Levy has settled, adjudicated, and managed thousands of complex
cases in a broad array of subject matter areas.

A full-text copy of Mr. Levy's resume is available for free at:

    http://bankrupt.com/misc/GenTek_Lester_J_Levy_resume.pdf

Mr. Gorney is a member of the Mediation Panel of the U.S.
Bankruptcy Court of the Southern District of New York.  Mr.
Gorney has participated in mediation sessions in the U.S. Federal
Court in Boston, Massachusetts, and in the Southern District of
New York Bankruptcy Court.  In addition, Mr. Gorney has completed
40 hours of mediation training with Mediation Works, Inc., in
accordance with Massachusetts General Laws, Ch. 233 Section 23E.

A full-text copy of Mr. Gorney's resume is available for free at:

    http://bankrupt.com/misc/GenTek_Howard_N_Gorney_resume.pdf

Mr. Levy is on the Register of Mediators and Arbitrators. Mr.
Gorney's application for admission to mediation or voluntary
arbitration register is currently pending with the U.S. Bankruptcy
Court for the District of Delaware.

D. Scheduling of the Mediations

Given the large number of actions, Mr. Fishman notes that
individual scheduling of mediations will be implausible.

E. Stay of Discovery

Mr. Fishman observes that majority of the defendants agree that it
will be most efficient and cost-effective to stay discovery during
the mediation process.  Mr. Fishman, hence, asks the Court to
impose the stay, except with respect those defendants who objected
to the stay.

                       Revised Proposed Order

Mr. Fishman asks the Court to approve these modifications to the
Proposed Order:

    (a) If Mr. Fishman is unable to settle an Adversary Proceeding
        -- or determines that further informal settlement
        discussions will be unproductive -- then Mr. Fishman will
        serve on the applicable defendant, a notice that the
        Adversary Proceeding is referred to mandatory mediation.
        Mr. Fishman will settle or make the Mediation Demand no
        later than 90 days after an answer or other responsive
        pleading is filed by the defendant;

    (b) Mr. Levy and Mr. Gorney are appointed to serve as
        Mediators;

    (c) The Mediation Notice will be sent within 10 days after the
        Mediation Demand;

    (d) In relation to the Mediation Notice, the Mediator will
        have the discretion to reasonably accommodate a
        defendant's written concerns that the scheduled date is
        inconvenient.  The Mediator may then require the
        defendant to appear on the next scheduled date for
        mediations;

    (e) A defendant has 10 days after receiving the Mediation
        Demand to send a written request to Mr. Fishman and his
        counsel that the mediation take place in Wilmington,
        Delaware -- the Opt-Out Request.  If an Opt-Out Request is
        made, the mediation will be held in Wilmington and will be
        promptly rescheduled if necessary.  The Mediator will have
        the discretion to allow a defendant to appear
        telephonically based on the written request and reasons
        submitted by the defendant;

    (f) The mediations will be held as many as eight matters per
        day, scheduled over two consecutive days, no less
        frequently than once per month or more frequently than
        three times per month;

    (g) Mr. Fishman will pay all the Mediator's fees and costs
        associated with the mediation regardless of whether the
        mediation is held in Chicago or Wilmington, including the
        Mediator's hourly fees and any travel expenses incurred by
        the Mediator;

    (h) Pursuant to the Preference Claim Litigation Trust
        Agreement, if a settlement is reached at mediation, then
        a settlement agreement will be entered into by the
        parties.  No further action from the Court will be
        necessary and Mr. Fishman will dismiss the Adversary
        Proceeding with prejudice upon payment of the settlement
        amount, if any, within 30 days of the receipt of the
        payment; and

    (i) There will be a stay of formal discovery in each of the
        Adversary Proceedings, except in the cases against ESCO,
        Metric Punch Co., and Support Terminals Operating
        Partnership, LP, from the date the Court approves Mr.
        Fishman's request through the date of service of the
        Unsuccessful Mediation Notice, absent leave granted by the
        Mediator or written motion served on Mr. Fishman with at
        least 10 business days' notice.

Headquartered in Hampton, New Hampshire, GenTek Inc. --
http://www.gentek-global.com/-- is a technology-driven
manufacturer of communications products, automotive and industrial
components, and performance chemicals. The Company filed for
Chapter 11 protection on October 11, 2002 (Bankr. D. Del. Case No.
02-12986) and emerged on Nov. 10, 2003 under the terms of a
confirmed plan that eliminated $670 million of debt and delivered
94% of the equity in Reorganized GenTek to the Company's secured
lenders.  Old subordinated bondholders took a 4% slice of the
equity pie and prepetition unsecured creditors shared a 2% stake
in the Reorganized Company.  Old Equity Interests were wiped out.
Mark S. Chehi, Esq., and D.J. Baker, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring.  When the Debtors filed for protection from its
creditors, they listed $1,219,554,000 in assets and $1,456,000,000
in liabilities. (GenTek Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


GLOBAL CROSSING: Settles with U.S. Labor Dept. on Retirement Plan
-----------------------------------------------------------------
U.S. Secretary of Labor Elaine L. Chao disclosed the settlements
with former directors and officers of Global Crossing stemming
from the Department's investigation of the Global Crossing
Retirement Savings Plan.

The 401(k) plan lost tens of millions of dollars as a result of
its extensive stock holdings in Global Crossing stock, which lost
virtually all of its value.  The settlement covers the two former
inside directors of Global Crossing, Thomas Casey (former Chief
Executive Officer) and Gary Winnick (former Chairman of the
Board), as well as the three former members of the Employee
Benefits Committee, Dan J. Cohrs, Joseph Perrone, and John
Comparin.

The Secretary entered into the agreements in connection with the
proposed settlement of the private class action lawsuit brought on
behalf of the participants of the plan.  If the court approves the
class-action settlement, the total recovery will be $79 million,
including $25 million that Winnick placed in an irrevocable escrow
account for the plan at the Secretary's behest, and an additional
$54 million funded by defendants' insurance policies in the
private action.

"I am pleased that the Global Crossing workers, retirees and their
families will receive a significant financial recovery," said U.S.
Secretary of Labor Elaine L. Chao.  "Fiduciaries have a serious
and significant responsibility to protect the long term pension
security of their workers.  I hope this lesson gets through to
others."

Under the terms of the new agreements, the former Global Crossing
fiduciaries are prohibited from acting as fiduciaries to ERISA-
covered benefit plans for five years unless they first notify the
Department of Labor of their intention to serve as fiduciaries,
and the Department agrees.  The agreements are predicated upon
approval of the class action settlement, and may be terminated by
the Department if the class action settlement is not approved.

The settlement resulted from a comprehensive investigation
conducted by the Los Angeles Regional Office of the Department's
Employee Benefits Security Administration and the Office of the
Solicitor.  It was coordinated through President Bush's Corporate
Fraud Task Force.

U.S. Labor Department (DOL) releases are accessible on the
Internet at http://www.dol.gov/The information in this news
release will be made available in alternate format upon request
(large print, Braille, audio tape or disc) from the COAST office.
Please specify which news release when placing your request.
Call 202-693-7765 or TTY 202-693-7755.  DOL is committed to
providing America's employers and employees with easy access to
understandable information on how to comply with its laws and
regulations.  For more information, visit
http://www.dol.gov/compliance

Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe.  Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services.  The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02-
40188).  When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts.  Global Crossing emerged from
chapter 11 on Dec. 9, 2003.  (Global Crossing Bankruptcy News,
Issue No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000)


HANGER ORTHOPEDIC: Earnings Falloff Prompts S&P's Low-B Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and senior secured ratings and its 'B-' subordinated debt
ratings on Hanger Orthopedic Group, Inc., on CreditWatch with
negative implications in light of a substantial falloff in the
company's pretax earnings.  Hanger has delayed filing its 10Q as
it has been unable to complete its financial review, citing the
time and effort to cooperate with an internal investigation of
alleged billing discrepancies.  "These discrepancies are not, at
this time, a ratings concern given that they appear to be limited
to a single center and represent less than 0.5% of revenues," said
Standard & Poor's credit analyst David Lugg.

Of much greater concern are the pretax earnings, which have
tumbled to $2.5 million for the quarter ended June 30, 2004, from
$15.8 million for the same period last year.  A decline in same-
center sales combined with increased material, selling, general,
and administration costs led to the earnings drop.  This decline
will put the company in violation of the total leverage covenant
for its credit facility.  Hanger is in discussions with its
lenders to attempt a cure of this violation.

In the meantime, the company had almost $15 million in cash as of
Aug. 6, 2004.

Bethesda, Maryland-based Hanger provides patient care services for
orthotics and prosthetics at about 600 centers located throughout
the U.S.

Standard & Poor's will seek clarification of the causes of the
earnings shortfall and the company's efforts to restore its
operating performance before resolving the CreditWatch listing.


KAISER: Exploring Options After No Qualified Bids on QAL Interest
-----------------------------------------------------------------
Kaiser Aluminum said that, because no qualified bids were received
as of Tuesday's deadline, it is reviewing additional options in
connection with the potential sale of the company's 20% interest
in the QAL alumina refinery in Australia. The company will not
conduct the previously contemplated auction on Aug. 16 for the
sale of that interest.

As reported in the Troubled Company Reporter's July 7, 2004
edition, Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, in Wilmington, Delaware, relates that QAL operates an
alumina refinery at Gladstone in Queensland that tolls bauxite,
supplied by the Participants, into alumina at a cost in proportion
to the Participants' ownership interests in QAL.  Kaiser Australia
and certain of the other Participants purchase the bauxite for
processing at QAL from Comalco Limited pursuant to separate
bauxite supply agreements.

Queensland Alumina Limited is a Queensland, Australia corporation
that operates as an independent production company.  The direct
shareholders in QAL are referred to as Participants and their
parent companies are referred to as Guarantors.  Kaiser Alumina
Australia Corporation, a wholly owned subsidiary of Kaiser
Aluminum and Chemical Corporation, is a Participant in QAL and
KACC is a Guarantor.

Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429).  Corinne Ball, Esq., at Jones
Day represents the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts.


KAISER ALUMINUM: Wants to Reject Structure Computer Service Pact
----------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code, Kaiser Aluminum
Corporation and its debtor-affiliates sought and obtained the
permission of the U.S. Bankruptcy Court for the District of
Delaware to reject a computer service agreement with Structure,
Inc.

The original parties to the Service Agreement are Kaiser Aluminum
& Chemical Corporation and PKS Information Services, Inc., a
predecessor-in-interest to Structure, Inc.  The services provided
under the Computer Service Agreement include:

    * production control,

    * system and subsystem monitoring,

    * output processing,

    * disk storage,

    * creation of a tape library, and

    * technical support, including on-line support and a telephone
      help desk.

The term of the Service Agreement commenced on April 29, 1992, and
continued through April 29, 1997.  The term was extended until
August 31, 2005.

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, explains that the rejection of the Service
Agreement permits KACC to recognize cost savings that will accrue
to the estate.  To the extent the services provided pursuant to
the Service Agreement are still necessary for the operation of
KACC's businesses, KACC can obtain those services or otherwise
process their data internally at a lower cost.

Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429).  Corinne Ball, Esq., at Jones
Day represents the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts.


INSIGHT HEALTH: Opens New Columbus Diagnostic Imaging Center
------------------------------------------------------------
InSight Health Services Corp., a leading provider of diagnostic
imaging services nationwide, opened a new diagnostic imaging
center in Columbus, Ohio by its affiliate InSight Proscan, LLC.
The center will operate as Polaris Open MRI.

Polaris Open MRI is located at 2141 Polaris Parkway, telephone:
614-841-0800.  The 3,000 square foot location will offer high-
field open MRI (magnetic resonance imaging) services, and features
a state-of-the-art Hitachi Altaire scanner capable of producing
high quality images in rapid scan time.

This center marks the company's third in the Columbus area. For
the past eight years, InSight has built a strong presence and
earned a solid reputation throughout Columbus since its purchase
of Broad Street Imaging.  Broad Street Imaging is located in the
downtown area at 750 E. Broad Street, telephone: 614-621-9100.
Additionally, another affiliate of InSight, Dublin Diagnostic
Imaging, LLC, operates a center at 4351 Dale Drive in Dublin,
telephone: 614-761-2100.  InSight is the majority member in each
of these two joint ventures.  Stephen J. Pomeranz, M.D. ProScan
Imaging CEO and leading radiologist in the Ohio Valley, along with
several affiliates, comprise the balance of membership in these
joint ventures.  Dr. Pomeranz and his radiology team, ProScan
Reading Services, will provide the professional interpretations
for all patients imaged at the center.  PRS is a leader in
teleradiology and MR Education, providing interpretation for about
500 sites around the world.  ProScan radiologists have read over
600,000 MRI examinations, one of the largest case experiences in
the world.  They have recognized expertise in all facets of MRI,
and they specialize in CT, Nuclear, PET, and Ultrasound as well.

The new center will draw patients and referral sources from a
range of local communities including Columbus, Worthington,
Westerville, Dublin, Delaware, Lewis Center, Sunbury and Powell as
well as surrounding areas.

With the opening of the third Columbus-area location, InSight
named Jill Litzinger branch manager.  Ms. Litzinger, who also
serves as area manager for all three Columbus-area locations, is
responsible for overseeing the center's daily branch operations.
She has worked within the imaging industry for ten years and has
been employed with InSight since 1997.

"With the opening of this third location, we are committed to
providing high-quality diagnostic services to our customers and
the medical community throughout the Columbus area.  The new
Polaris Parkway center allows us to expand into the northern parts
of Columbus and compliments the other two locations we operate in
the surrounding area," Ms. Litzinger said.

Lake Forest, California-based, InSight is a privately held
provider of diagnostic imaging and related management services.
InSight serves managed care entities, hospitals and other
contractual customers from 231 sites (114 fixed/117 mobile) across
33 states.  During the past three years, the company has received
nearly 20 awards recognizing its growth, performance, management
and business practices.  For more information, visit
http://www.insighthealth.com/

                         *     *     *

As reported in the Troubled Company Reporter's June 25, 2004
edition, Standard & Poor's Ratings Services placed its 'B+'
corporate credit and senior secured debt ratings and its 'B-'
subordinated debt rating for InSight Health Services Corp. on
CreditWatch with negative implications.  InSight, a company that
provides diagnostic imaging services, is the operating subsidiary
of InSight Health Services Holdings Corp.

The CreditWatch placement follows the holding company's S-1 filing
with the SEC for an initial public offering of up to $675 million
of income deposit securities, representing shares of its Class A
common stock and 15-year senior subordinated notes.  In connection
with these offerings, the operating subsidiary, InSight Health
Services Corp., is expected to commence a tender offer for its
$250 million 9.875% senior subordinated notes due in 2011.  The
company is also expected to use proceeds from the IDS securities
and a new bank facility to refinance existing bank debt and to
fund a payment to its financial sponsors. As of May 31, 2004,
InSight's bank debt totaled $275 million.

Standard & Poor's believes that the IDS structure, in general,
exhibits an extremely aggressive financial policy.

"In issuing these securities, InSight will have significantly
reduced its financial flexibility given the anticipated high
demands on cash in the form of dividend and interest payments that
would together pay investors a committed yield," said Standard &
Poor's credit analyst Jill Unferth.  "As a result, the structure
will limit the company's ability to withstand operating pressures
that currently affect the highly competitive diagnostic imaging
industry."


INTERSTATE BAKERIES: Lenders Approve Credit Facility Amendment
--------------------------------------------------------------
Interstate Bakeries Corporation (NYSE:IBC), the nation's largest
baker and distributor of fresh baked bread and sweet goods,
received the requisite approvals from its lenders to amend its
senior secured credit facility.

Among other items in the amendment, the leverage and interest
coverage covenants will be amended through the first quarter of
fiscal 2006, providing the Company with improved financial
flexibility.  Specifically, the Company covenants that:

   (A) its Consolidated Leverage Ratio will not exceed:

                                                    Maximum
        For the Fiscal                            Consolidated
        Quarter Ending                           Leverage Ratio
        --------------                           --------------
        May 29, 2004                              4.00 to 1.00
        August 21, 2004 through May 28, 2005      4.50 to 1.00
        August 20, 2005                           4.25 to 1.00
        November 12, 2005 and thereafter          2.75 to 1.00

       and

   (B) it will maintain a Consolidated Interest Coverage Ratio of
       no less than:
                                                    Minimum
                                                  Consolidated
        For the Fiscal                          Interest Coverage
        Quarter Ending                               Ratio
        --------------                          ----------------
        May 29, 2004                              3.75 to 1.00
        August 21, 2004 through August 20, 2005   3.00 to 1.00
        November 12, 2005 and thereafter          5.00 to 1.00

As a result of this amendment, the interest rates for all loans
under the credit facility will increase by 0.50%.  In addition,
under the terms of the credit facility amendment, the Company will
be prohibited from paying dividends until its senior secured bank
debt is rated at least BB- by Standard & Poor's Ratings Services
and Ba3 by Moody's Investors Service, in each case with a stable
outlook or better.

The Lenders will also receive first priority mortgages on the
Company's otherwise unencumbered real estate assets.

As a condition to this amendment becoming effective, the Company
is required to raise at least $95 million in net proceeds from an
offering of securities that are junior to the senior secured
credit facility.  This condition will be satisfied by the closing
of a private placement of convertible notes -- which was scheduled
and expected to close late yesterday.

As contemplated in the amendment, the net proceeds will be used to
prepay the Company's principal payments due under its senior
secured credit facility over the course of the next four quarters
and for general corporate purposes, improving the Company's near-
term liquidity and financial flexibility.  The consortium of
lenders identified in the FIFTH AMENDMENT, dated as of August 12,
2004, to the Amended and Restated Credit Agreement, dated as of
April 25, 2002 (as amended, supplemented or otherwise modified
from time to time) consists of:

   * AgFirst Farm Credit Bank
   * AIMCO CDO SERIES 2000-A
   * AIMCO CLO SERIES 2001-A
   * ALLSTATE LIFE INSURANCE COMPANY
   * AMMC CDO II, LIMITED (by American Money Management Corp., as
          Collateral Manager)
   * AMMC CLO III, LIMITED (by American Money Management Corp., as
          Collateral Manager)
   * AS INVESTMENT ADVISOR
   * AURIUM CLO 2002-1 LTD., as Assignee (by Columbia Management
          Advisors, Inc., as Investment Manager)
   * AURUM CLO 2002-1 LTD., as Assignee (by Columbia Management
          Advisors, Inc. as Investment Manager)
   * Banco Espirito Santo, S.A.
   * BANK HAPOALIM B.M.
   * BANK OF AMERICA, N.A.
   * Bank of Montreal
   * BEAR STEARNS CORPORATE LENDING INC., as ASSIGNOR
   * BIG SKY SENIOR LOAN FUND, LTD. by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * BNP Paribas
   * BRYN MAWR CLO, Ltd. (by Deerfield Capital Management LLC as
          its Collateral Manager)
   * CALYON NEW YORK BRANCH, as successor to Credit Lyonnais
   * CHINATRUST COMMERCIAL BANK
   * CoBank, ACB
   * COLUMBIA FLOATING RATE ADVANTAGE FUND (by Highland Capital
          Management, L.P., its Investment Advisor)
   * COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY (by Highland
          Capital Management, L.P., its Investment Advisor)
   * Comerica Bank
   * Commerce Bank, N.A.
   * COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
          "RABOBANK INTERNATIONAL" NEW YORK BRANCH
   * COSTANTINUS EATON VANCE CDO V, LTD, by EATON VANCE MANAGEMENT
          AS INVESTMENT ADVISOR
   * DBS BANK LTD., LOS ANGELES AGENCY
   * EATON VANCE CDO II, LTD., by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * EATON VANCE CDO III, LTD., by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * EATON VANCE CDO VI, LTD., by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * EATON VANCE INSTITUTIONAL SENIOR LOAN FUND by EATON VANCE
          MANAGEMENT AS INVESTMENT ADVISOR
   * EATON VANCE LIMITED DURATION INCOME FUND by EATON VANCE
          MANAGEMENT
   * EATON VANCE SENIOR FLOATING-RATE TRUST by EATON VANCE
          MANAGEMENT AS INVESTMENT ADVISOR
   * EATON VANCE SENIOR INCOME TRUST by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * ELC (CAYMAN) LTD. CDO SERIES 1999-I (by Babson Capital
          Management LLC as Collateral Manager)
   * ELT LTD.
   * Farm Credit Services of America, PCA
   * Farm Credit Services of Minnesota Valley, PCA dba FCS
          Commercial Finance Group
   * Farm Credit Services of Missouri, PCA
   * GLENEAGLES TRADING LLC
   * GRAYSON & CO. by BOSTON MANAGEMENT AND RESEARCH AS INVESTMENT
          ADVISOR
   * HARBOUR TOWN FUNDING LLC
   * HarbourView CLO IV
   * HarbourView CLO V
   * HARRIS TRUST & SAVINGS BANK, as an Issuing Lender and a
          Lender
   * IKB Capital Corporation
   * ING PRIME RATE TRUST (by Aeltus  Investment Management, Inc.,
          as its investment manager)
   * ING SENIOR INCOME FUND (by Aeltus Investment Management,
          Inc., as its investment manager)
   * JP MORGAN CHASE BANK, as Administrative Agent, an Issuing
          Lender and a Lender
   * Landmark II CBO Limited (by Aladdin Capital Management LLC)
   * Landmark III CDO Limited (by Aladdin Capital Management LLC)
   * Landmark III CDO Limited (by Aladdin Capital Management LLC)
   * LOAN FUNDING IV LLC (by Highland Capital Management, L.P., as
          Portfolio Manager)
   * LONG GROVE CLO, LIMITED (by Deerfield Capital Management LLC
          as its Collateral Manager)
   * LONG LANE MASTER TRUST IV
   * Ltd., as Term Lender
   * MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY (by Babson
          Capital Management LLC as Investment Adviser)
   * MASSMUTUAL/DARBY CBO LLC (by MassMutual/Darby CBO IM, Inc. as
          LLC Manager)
   * ML CLO XX PILGRIM AMERICA (CAYMAN) LTD, by ING Investments,
          LLC, as its investment manager
   * ML CLO XII PILGRIM AMERICA (CAYMAN) LTD, by ING Investments,
          LLC, as its investment manager
   * Mountain Capital CLO 1 Ltd.
   * Mountain Capital CLO 11 Ltd.
   * MUIRFIELD TRADING LLC
   * NATIONAL BANK OF KUWAIT, S.A.K. GRAND CAYMAN BRANCH
   * NORTHWOODS CAPITAL II, LIMITED (by ANGELO, GORDON & CO.,
          L.P., AS COLLATERAL MANAGER)
   * NORTHWOODS CAPITAL III, LIMITED (by ANGELO, GORDON & CO.,
          L.P., AS COLLATERAL MANAGER)
   * NORTHWOODS CAPITAL IV, LIMITED (by ANGELO, GORDON & CO.,
          L.P., AS COLLATERAL MANAGER)
   * NORTHWOODS CAPITAL, LIMITED (by ANGELO, GORDON & CO., L.P.,
          AS COLLATERAL MANAGER)
   * Oppenheimer Senior Floating Rate Fund
   * OXFORD STRATEGIC INCOME FUND by EATON VANCE MANAGEMENT AS
          INVESTMENT ADVISOR
   * PAMCO CAYMAN LTD.
   * PB Capital
   * PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD, by ING
          Investments, LLC, as its investment manager
   * PILGRIM CLO 1999 - 1 LTD, by ING Investments, LLC, as its
          investment manager
   * RESTORATION FUNDING CLO, LTD. (by Highland Capital
          Management, L.P., its Investment Advisor)
   * Sankaty Advisors, LLC as Collateral Manager for AVERY POINT
          CLO,
   * Sankaty Advisors, LLC as Collateral Manager for Castle Hill I
          - INGOTS, Ltd., as Term Lender
   * Sankaty Advisors, LLC as Collateral Manager for Castle Hill
          II -  INGOTS, Ltd., as Term Lender
   * Sankaty Advisors, LLC as Collateral Manager for Castle Hill
          III CLO, Ltd., as Term Lender
   * Sankaty Advisors, LLC as Collateral Manager for Race Point
          CLO, Limited, as Term Lender
   * Sankaty Advisors, LLC as Collateral Manager for Race Point II
          CLO, Ltd., as Term Lender
   * SENIOR DEBT PORTFOLIO by BOSTON MANAGEMENT AND RESEARCH AS
          INVESTMENT ADVISOR
   * SEQUILS - PILGRIM I, LTD, by ING Investments, LLC, as its
          investment manager
   * SEQUILS-Cumberland I, Ltd. (by Deerfield Capital Management
          LLC as its Collateral Manager)
   * SIMSBURY CLO, LIMITED (by Babson Capital Management LLC under
          delegated authority from Massachusetts Mutual Life
          Insurance Company as Collateral Manager)
   * Smoky River CDO, L.P. (by RBC Leveraged Capital as Portfolio
          Advisor)
   * Smoky River CDO, L.P. (by RBC Leveraged Captial as Portfolio
          Advisor)
   * SRF 2000, INC.
   * SRF TRADING, INC.
   * STEIN ROE & FARNHAM CLO 1 LTD. (by Columbia Management
          Advisors, Inc. as Investment Manager)
   * STEIN ROE & FARNHAM CLO 1 LTD. (by Columbia Management
          Advisors, Inc. as Investment Manager)
   * SUFFIELD CLO, LIMITED (by Babson Capital Management LLC as
          Collateral Manager)
   * SunTrust Bank
   * THE BANK OF NOVA SCOTIA
   * The Sumitomo Trust & Banking Co., Ltd., New York Branch
   * TOLLI & CO by EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR
   * Toronto Dominion (New York), Inc.
   * TRS 1 LLC
   * TRS ECLIPSE LLC
   * U.S. AGBANK, FCB, fka FARM CREDIT BANK OF WICHITA, as a
          Lender
   * UMB Bank, n.a.
   * Wachovia Bank National Association

In June, 2004, IBC disclosed irregularities in its accounting for
workers' compensation reserves. At that time, IBC said it would
increase those reserves by 40% and take record a $40 million
pretax charge. The Company has received notice from the Securities
and Exchange Commission that the SEC is conducting an informal
inquiry.  IBC's Audit Committee has retained the law firm of
Skadden, Arps, Slate, Meagher & Flom LLP to investigate the
Company's manner for setting its workers' compensation reserves
and other reserves. Last month, Interstate Bakeries named Ronald
B. Hutchison as its new Executive Vice President and Chief
Financial Officer.

Interstate Bakeries Corporation is the nation's largest wholesale
baker and distributor of fresh baked bread and sweet goods, under
various national brand names, including Wonder, Hostess, Dolly
Madison, Merita, Drake's and Baker's Inn. The Company, with 55
bread and cake bakeries located in strategic markets from coast-
to-coast, is headquartered in Kansas City, Missouri.


INTERSTATE BAKERIES: Private Convertible Placement Raises $100MM
----------------------------------------------------------------
Interstate Bakeries Corporation (NYSE:IBC), the nation's largest
baker and distributor of fresh baked bread and sweet goods,
entered into definitive agreements with qualified institutional
buyers for the private placement of $100 million aggregate
principal amount of its 6.0% senior subordinated convertible notes
due 2014.  Purchasers have an option to purchase in the aggregate
up to $20 million in additional securities for a period of 60 days
following the closing.

The notes are senior subordinated obligations of Interstate
Bakeries Corporation, and are guaranteed on a senior subordinated
basis by these wholly owned domestic IBC subsidiaries:

     * Baker's Inn Quality Baked Goods, LLC;
     * IBC Sales Corporation;
     * IBC Services, LLC;
     * Interstate Brands Corporation; and
     * IBC Trucking, LLC.

At the option of the holder under certain circumstances, the notes
convert into shares of the Company's common stock at an initial
conversion rate of 98.9854 shares per $1,000 principal amount of
notes (an initial conversion price of $10.1025 per share), subject
to adjustment.  The notes pay interest semi-annually in arrears at
an annual rate of 6.0%.  The notes mature on August 15, 2014, and
may not be redeemed by the Company prior to August 15, 2011.
Holders of the notes may require the Company to repurchase all or
any portion of the notes for cash or, at the Company's option
subject to certain conditions, in common stock or a combination
thereof, on August 15, 2011 and upon a fundamental change (meaning
a transaction triggering a change of control).

The net proceeds of the offering will be used to prepay the
Company's principal payments due under its senior secured credit
facility over the course of the next four quarters and for general
corporate purposes, improving the company's near-term liquidity
and financial flexibility.

U.S. Bank National Association serves as the Indenture Trustee for
the new notes.  A full-text copy of the Indenture is available at
no charge at:


http://www.sec.gov/Archives/edgar/data/829499/000095015004000660/a01195exv10
w1.txt

Interstate Bakeries Corporation legal counsel in this transaction
is:

         Mary Ellen Kanoff, Esq.
         Latham & Watkins LLP
         633 West Fifth Street, Suite 4000
         Los Angeles, California 90071
         Facsimile (213) 485-1234
         Telephone (213) 891-8763

Documents delivered to the Securities and Exchange Commission in
connection with this private placement indicate that one or more
of the unidentified purchasers is represented by:

         Eleazer N. Klein, Esq.
         Schulte Roth & Zabel LLP
         919 Third Avenue
         New York, New York  10022
         Telephone (212) 756-2000
         Facsimile (212) 593-5955

The notes, the guarantees and the shares of common stock issuable
upon conversion of the notes to be offered have not been
registered under the Securities Act of 1933, as amended, or any
state securities laws and, unless so registered, the securities
may not be offered or sold in the United States except pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. This announcement is neither an offer to
sell nor a solicitation of an offer to buy any of these
securities.

In June, 2004, IBC disclosed irregularities in its accounting for
workers' compensation reserves. At that time, IBC said it would
increase those reserves by 40% and take record a $40 million
pretax charge. The Company has received notice from the Securities
and Exchange Commission that the SEC is conducting an informal
inquiry.  IBC's Audit Committee has retained the law firm of
Skadden, Arps, Slate, Meagher & Flom LLP to investigate the
Company's manner for setting its workers' compensation reserves
and other reserves. Last month, Interstate Bakeries named Ronald
B. Hutchison as its new Executive Vice President and Chief
Financial Officer.

Interstate Bakeries Corporation is the nation's largest wholesale
baker and distributor of fresh baked bread and sweet goods, under
various national brand names, including Wonder, Hostess, Dolly
Madison, Merita, Drake's and Baker's Inn. The Company, with 55
bread and cake bakeries located in strategic markets from coast-
to-coast, is headquartered in Kansas City, Missouri.


INTERSTATE OPERATING: Moody's Rates $75M Loan & $60M Revolver B2
----------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the five-
year $75 million secured term loan and to the three-year $60
million revolver of Interstate Operating Company, L.P., a
subsidiary Interstate Hotels & Resorts, Inc. which guarantees
these bank credit facilities.  These bank facilities are secured
by the capital stock and assets of the borrower, and assets of the
guarantor, and benefit from the first lien rights to receive
management contract payments.  Net proceeds will be used to repay
existing indebtedness, to fund investments and for general
corporate purposes.  This is the first time Moody's has assigned
ratings to the company.  The rating outlook is stable.

Moody's said that the ratings reflect Interstate's modest scale in
the hotel management business relative to major hotel brand
managers, such as Marriott International, Starwood and Hilton,
moderately high financial leverage and expected low recovery
value, in the case of distress, as well as execution risks
associated with its expanded investment strategy to invest in
hotel properties.  These weaknesses are balanced by Interstate's
healthy cash flow coverage measures, low operating leverage,
established and solid operating platform, relatively stable
management contract cash flows (which are less volatile than the
underlying hotel cash flows), ability to manage through the recent
severe lodging downcycle, and good diversification by geography,
hotel segment and brand affiliation.  The firm also benefits from
a net operating loss balance of over $19 million that is likely to
be realized over the near term. Additional positive factors
include management's efforts to reduce its exposure to its
corporate housing business, which is not core to its long-term
strategy.

Moody's noted that Interstate Hotels & Resorts' restrictive bank
covenants could constrain financial flexibility should the firm
experience operating underperformance.  Moody's also believes that
Interstate's significant exposure to a single hotel owner
(MeriStar Hospitality Corporation) is an important credit concern
as management contracts with MeriStar represent about one-third of
Interstate's EBITDA.  Recent change in the business relationship
between Interstate and MeriStar could result in the additional,
albeit modest loss of management contracts over time.

In Moody's view, one of the key challenges Interstate Hotels &
Resorts faces is growing its cash flow diversification through
expansion into hotel ownership, and to materially increase hotel
contracts under management.  Moody's thinks that organic growth
opportunities are limited as hotel management contracts typically
depend on a change in ownership of hotels, absent non-performance
of contracts by a hotel manager.  Interstate intends to grow its
hotel management contract business by stepping up its hotel joint
venture acquisitions.  This strategy entails considerable
execution risk given highly competitive market conditions for
hotel acquisitions.  This risk is heightened by the material
amount of leverage that Interstate could utilize to fund its share
of joint venture investments.  Interstate's pro forma leverage for
the secured facility transaction will be 3.2x (Debt/EBITDA).  The
rating agency believes this level of leverage is moderately high
given the firm's modest scale, exposure to lodging cycle and
limited access to capital markets.

The performance of hotels managed by Interstate is improving,
reflecting continued recovery in the lodging industry, which
should boost Interstate's cash flow performance.  However, the
company's largest managed portfolio, hotels owned by MeriStar
Hospitality Corporation, has been underperforming due mainly to
significant deferred capital expenditures and recently initiated
renovations by MeriStar.  Under a recently renegotiated agreement
between Interstate and MeriStar, MeriStar owes termination fees to
Interstate on management contracts that were terminated upon a
change in ownership.  MeriStar also obtained at-will termination
rights to terminate management contracts covering up to 600 rooms
a year upon payment of termination fees.

The stable rating outlook reflects Moody's expectations that
Interstate's earnings and balance sheet will continue to improve
as the firm implements its growth plans.  Ratings improvement will
depend on the firm's ability to successfully execute on its growth
strategy and achieve greater cash flow diversification through
additional management contracts and hotel investments.  Downward
pressure on firm's ratings would most likely result should the
implementation of its investment and other growth initiatives
prove more challenging than anticipated.  Negative ratings
adjustment would also result should Interstate be unable to
replace terminated management contracts.

Interstate Hotels & Resorts [NYSE: IHR] is the largest independent
operator of hotel properties in the USA.  As of June 30, 2004, the
company managed 269 hotels, which included branded limited-service
properties, as well as branded full-service service and
independent properties, in the USA, Canada, Portugal and Russia.
Interstate participates in hotel joint ventures through which it
has ownership stakes in 29 hotels, which it also manages.


KMART HOLDING: Joining the Nasdaq-100 Index Beginning August 19
---------------------------------------------------------------
KMart Holding Corporation (Nasdaq: KMRT) of Troy, Michigan, will
become a component of the NASDAQ-100 Index(R) (Nasdaq: NDX),
effective at the beginning of trading Thursday, August 19, 2004.
KMart will also be included in the NASDAQ-100 Index Tracking
Stock(SM)(Amex:QQQ).  KMart Holding Corporation will replace
PanAmSat Corporation (Nasdaq: SPOT), which is to be acquired by
Kohlberg Kravis Roberts & Co. L.P., subject to shareholder
approval and other closing conditions.

With a market capitalization of approximately $5.8 billion, KMart
Holding Corporation is a mass merchandising company that offers
customers quality products through a portfolio of exclusive
brands.

The NASDAQ-100 Index, launched in January 1985, is one of the most
widely followed benchmarks in the world.  The NASDAQ-100 Index
Tracking Stock represents ownership in the NASDAQ-100 Trust.  The
Trust holds a portfolio of equity securities that compose the
NASDAQ-100 Index and aims to provide investment results that
generally correspond with its performance.

NASDAQ is the largest U.S. electronic stock market.  With
approximately 3,300 companies, it lists more companies and, on
average, trades more shares per day than any other U.S. market.
It is home to companies that are leaders across all areas of
business including technology, retail, communications, financial
services, transportation, media and biotechnology.  NASDAQ is the
primary market for trading NASDAQ-listed stocks.  Approximately
48% of NASDAQ-listed shares traded are reported to NASDAQ systems.
For more information about NASDAQ, visit the NASDAQ Web site at
http://www.NASDAQ.com/or the NASDAQ Newsroom(SM) at
http://www.NASDAQ.com/newsroom

The Trustee for the NASDAQ-100 Trust is required to adjust the
composition of the Trust within 3 business days of the effective
date of a change to the composition of the NASDAQ-100 Index.

An investor should consider investment objectives, risks, charges
and expenses carefully before investing.  For this and other
information about QQQ, a unit investment trust, obtain a
prospectus from your broker, or call 888-627-3837.  Read it
carefully before you invest.

While there is no assurance that the performance of the NASDAQ-100
Index can be fully matched, the NASDAQ-100 Index Tracking Stock is
designed to provide, before expenses, investment results that
generally correspond to the performance of the NASDAQ-100 Index.
Index performance does not reflect the fees and costs associated
with investing.  Investors cannot invest directly in the Index.

The sponsor of the NASDAQ-100 Trust(SM), a unit investment trust,
is NASDAQ Financial Products Services, Inc., a wholly owned
subsidiary of The NASDAQ Stock Market, Inc.

ALPS Distributors, Inc., a registered broker-dealer, is
distributor for the Trust.


LANCE Trust: Fitch Upgrades $27.5 Notes to BB & $23M Notes to B+
----------------------------------------------------------------
Fitch Ratings upgrades both the leveraged asset notes of LANCE
Trust (series 1999-1) and the leveraged asset notes of LANCE Trust
(series 00-1-A).  Both Trust Series are synthetic collateralized
loan obligations -- CLOs -- which allow investors to participate
in the credit performance of diversified pools of bank loans
originated by JPMorgan Chase Bank formerly known as Chase
Manhattan Bank, the swap counterparty.

The following securities are upgraded:

   -- $27,500,000 leveraged asset notes to 'BB' from 'B-' issued
      by LANCE Trust (series 1999-1) maturing on January 15, 2005;

   -- $23,000,000 leveraged asset notes to 'B+' from 'B-' issued
      by LANCE Trust (series 00-1-A) maturing on October 15, 2005.

LANCE Trust (series 1999-1), which closed on December 15, 1999,
was established to provide credit protection on up to $550 million
reference portfolio of senior bank loans.

LANCE Trust (series 00-1-A), which closed on October 17, 2000, was
formed to provide credit protection on up to $460 million
reference portfolio of senior bank loans.

Since the last review conducted in August 2003, the reference
pools have experienced no new defaults and the current loan prices
of defaulted assets are higher than those during the last review.
In addition, both transactions are closer to maturity with LANCE
Trust (series 1999-1) maturing in less than 6 months and LANCE
Trust (series 00-1-A) maturing in less than 15 months.  After
reviewing the portfolios' current default levels, evaluating the
credit quality of the remaining loan pools, conducting extensive
discussions with the sponsor/swap counterparty, and performing
cash flow stress runs based on the remaining lives and quality of
the reference assets, Fitch has determined that the current 'B-'
ratings assigned to the above-mentioned leveraged asset notes no
longer reflect the current assessment of the likelihood of timely
payment of interest and ultimate repayment of principal to the
noteholders.  Fitch will continue to monitor and review these
transactions for future rating adjustments.


LIQUIDMETAL TECH: Expects to Complete Audits by September 30
------------------------------------------------------------
Liquidmetal Technologies, Inc. (Pink Sheets:LQMT) reported in a
Form 12b-25 filed with the Securities and Exchange Commission that
it did not file its report on Form 10-Q for the quarter ended June
30, 2004, within the required 40-day reporting period.  The delay
is the result of the ongoing audits and expected restatement of
the company's consolidated financial results for certain prior
reporting periods.  Liquidmetal and Stonefield Josephson Inc., the
company's independent auditor, currently expect to complete the
audits and SEC filings for all reporting periods under review,
including the results for the first and second quarters of 2004,
by the end of September 2004.

As previously disclosed, Stonefield was engaged as Liquidmetal's
new independent auditor on May 21, 2004.  Stonefield is currently
conducting a full audit of the company's consolidated financial
statements for the three years ended December 31, 2001, 2002, and
2003, as well as reviews of the company's consolidated financial
statements for the quarters ended March 31 and June 30, 2004.
Given the time-consuming nature of comprehensively auditing three
years of consolidated financial statements and reviewing two
quarters of financial statements in 2004, Liquidmetal has not yet
filed its Form 10-K for the year ended December 31, 2003 or its
Forms 10-Q for the quarters ended March 31 and June 30, 2004.

                About Liquidmetal Technologies, Inc.

Liquidmetal Technologies, Inc., http://www.liquidmetal.com/is the
leading developer, manufacturer, and marketer of products made
from amorphous alloys.  Amorphous alloys are unique materials that
are characterized by a random atomic structure, in contrast to the
crystalline atomic structure possessed by ordinary metals and
alloys.  Bulk Liquidmetal(R) alloys are two to three times
stronger than commonly used titanium alloys, harder than tool
steel, and relatively non-corrosive and wear resistant.  Bulk
Liquidmetal alloys can also be molded into precision net-shaped
parts similar to plastics, resulting in intricate and
sophisticated engineered designs.  Liquidmetal Technologies is the
first company to produce amorphous alloys in commercially viable
bulk form, enabling significant improvements in products across a
wide array of industries.  The combination of a super alloy's
performance coupled with unique processing advantages positions
Liquidmetal alloys for what the company believes will be The Third
Revolution(TM) in material science.

                         *     *     *

                 Liquidity and Capital Resources

In its most recent Form 10-K for the fiscal year ended Dec. 31,
2002, filed with the Securities and Exchange Commission,
Liquidmetal Technologies reports:

"We believe that our current cash and cash equivalents, together
with anticipated cash flow from our operations, will be sufficient
to fund our working capital and capital expenditure requirements
for at least the next 12 months.  However, our future capital
needs will be dependent to a significant extent on our ability to
generate cash flow from operations.  Our projections of cash flows
from operations and, consequently, future cash needs are subject
to uncertainty.  If our available funds and cash generated from
operations are insufficient to satisfy our liquidity requirements,
we may need to raise additional capital to fund our working
capital or capital expenditure requirements.  We cannot be certain
that additional capital, whether through selling additional debt
or equity securities or obtaining a line of credit or other loan,
will be available to us or, if available, will be on terms
acceptable to us.  If we issue additional securities to raise
funds, these securities may have rights, preferences, or
privileges senior to those of the rights of our common stock and
our stockholders may experience additional dilution."

The company posted net losses in each quarter of 2002 and 2003 for
which it published financial results.


LOUDEYE: Plans to Acquire On Demand Distribution in Stock Swap
--------------------------------------------------------------
On June 22, 2004, Loudeye Corp. commenced a tender offer to
acquire 100% of the outstanding shares of On Demand Distribution
Ltd., a privately held digital music provider based in Europe.
Holders of more than 90% of OD2's share capital have already
accepted the offer.  Loudeye expects to acquire the remaining
shares on the same terms by October 2004 from shareholders of OD2
that subsequently accept the offer or pursuant to compulsory
sweep-along provisions provided for under English law.

In connection with the acquisition, Loudeye will initially issue
up to 13,950,000 shares of its common stock to existing OD2
shareholders and option holders (which amount includes shares
issuable upon exercise of OD2 options to be assumed by Loudeye and
constitutes approximately 19.9% of Loudeye's currently outstanding
shares of common stock).  Loudeye will also pay approximately
$2.3 million in cash to retire certain liabilities.  In addition,
Loudeye is obligated to pay an additional 9.6 million pounds
(approximately $17.5 million based on exchange rates as of June
21, 2004) over the next 18 months to OD2's shareholders, plus
additional contingent consideration of up to 10.3 million pounds
(approximately $18.8 million based on exchange rates as of June
21, 2004) if OD2 achieves certain financial performance targets
over the next 30 months.  Under the terms of the offer, future
cash consideration is payable in UK pounds and accordingly the
corresponding U.S. dollar amounts set forth above may vary with
fluctuations in the prevailing exchange rate.  All future payments
are payable in cash or, at Loudeye's election and if approved by
stockholders representing a majority of Loudeye's outstanding
shares (excluding shares issued in connection with the transaction
to the extent such shares are required to be excluded by the rules
of the Nasdaq Stock Market), in shares of Loudeye common stock,
the number of which will be determined based on Loudeye's volume
weighted average share price for a specified period prior to
issuance.  OD2 shareholders may also elect to receive promissory
notes in lieu of any cash payments that Loudeye may be required to
make.  Subject to approval by Loudeye's stockholders of an
increase in the number of shares of authorized common stock under
its Certificate of Incorporation and of an increase in the number
of shares that may be issued under its 2000 Stock Option Plan (and
subject to any other approvals that may be required by the Nasdaq
Stock Market), Loudeye has also agreed to reserve 2 million shares
for option grants under its 2000 Stock Option Plan to employees of
OD2 for future services.

Certain of OD2's principal shareholders have agreed that an
aggregate of 15% of the total consideration payable in the
transaction will be placed into an escrow account that will remain
open for 18 months to satisfy claims Loudeye may have with respect
to breaches of representations and warranties and certain other
matters described in a Deed Poll of Warranty and Indemnity.

The securities to be issued in connection with the acquisition
have not been registered and are being offered and sold in
reliance upon exemptions from the registration requirements of the
Securities Act provided by RegulationS and section 4(2)
thereunder.  Such securities may not be offered or sold in the
United States in the absence of an effective registration
statement or an exemption from the registration requirements under
the Securities Act.

                      About Loudeye Corp.

Loudeye is a worldwide leader in business-to-business digital
media solutions and the outsourcing provider of choice for
companies looking to maximize the return on their digital media
investment.  Loudeye combines innovative products and services
with the world's largest music archive and the industry's leading
digital media infrastructure enabling partners to rapidly and cost
effectively launch complete, customized digital media stores and
services.  For more information, visit http://www.loudeye.com/

                         *     *     *

In its Form 10-Q for the quarterly period ended March 31, 2004
filed with the Securities and Exchange Commission, Loudeye Corp.
reports:

"We may need to raise additional capital in the future, and if we
are unable to secure adequate funds on terms acceptable to us, we
may be unable to execute our business plan.  If we raise
additional capital, current stockholders may experience
significant dilution.

"As of March 31, 2004, we had approximately $34.8 million in cash
and cash equivalents, marketable securities, and restricted
investments.  In the first quarter of 2004, we completed a private
placement that resulted in net proceeds of $18.9 million.  We
have, however, experienced net losses from operations and net
losses are expected to continue into future periods.  If our
existing cash reserves prove insufficient to fund operating and
other expenses, we may find it necessary to secure additional
financing, sell assets or reduce expenditures further.  In the
event additional financing is required, we may not be able to
obtain such financing on acceptable terms, or at all.  If adequate
funds are not available or are not available on acceptable terms,
we may not be able to pursue our business objectives.  This
inability could seriously harm our business, results of operations
and financial condition.

"If additional funds are raised through the issuance of equity or
convertible debt securities, the percentage ownership of our
current stockholders will be reduced and these securities may have
rights and preferences superior to those of our current
stockholders.  If we raise capital through debt financing, we may
be forced to accept restrictions affecting our liquidity,
including restrictions on our ability to incur additional
indebtedness or pay dividends.

"We have never paid any dividends on our common stock and do not
plan to pay dividends on our common stock for the foreseeable
future. We currently intend to retain future earnings, if any, to
finance operations, capital expenditures and the expansion of our
business."

Arthur Andersen LLP audited Loudeye's financial statements for the
year ending Dec. 31, 2002, and expressed doubt about the company's
ability to continue as a going concern.  Arthur Andersen's 2003
audit did not contain this statement.


MARCHFIRST: ConnectMail Sale May Fetch Up to $2 Million Over Time
-----------------------------------------------------------------
BV Strategic Partners, LLC, one of marchFIRST, Inc.'s debtor-
affiliates, owns 2,165,293 Series A Preferred Membership Interests
in ConnectMail, Ltd.  George D. Molinsky has offered to buy those
securities from Andrew Maxwell, the Chapter 7 Trustee overseeing
the liquidation of marchFIRST's estate, for:

    * an immediate $1,500 cash payment; plus

    * 25% of the proceeds from any resale or transfer of the
      Securities within the next 3 years, subject to a
      $2,008,500 cap.

Mr. Maxwell tells that 363 Group, Inc., his securities liquidation
consultants, "have vigorously marketed the Securities."  Mr.
Maxwell and 363 Group are convinced Mr. Molinsky's offer is the
highest and best that can be obtained.

BV Strategic acquired the Securities in September 2000.  Mr.
Molinsky, Mr. Maxwell understands, owns additional interests in
ConnectMail.

Objections, if any, to the sale transaction must be filed with the
Court and served on:

     Steven S. Potts, Esq.
     Law Offices of Andrew J. Maxwell
     105 West Adams Street, Suite 3200
     Chicago, IL 60603
     Telephone (312) 368-1138
     Fax (312) 368-1080

marchFIRST, Inc., a high-flying Internet consulting firm with
reported revenues rising from $100 million in 1996 to $1.2 billion
in 2000, employed 9,000 people at its peak before tumbling into
chapter 11 in April 2001 and converted that proceeding to a
chapter 7 liquidation (Bankr. N.D. Ill. Case No. 01-24742) less
than a month later.  Andrew Maxwell in Chicago serves as the
chapter 7 trustee overseeing marchFIRST's liquidation.  Mr.
Maxwell has said in court papers that many tranactions designed to
give the illusion of success, wasteful spending, hiring too many
consultants, starting to build a grandiose corporate headquarters,
and the costs of a company jet, caused marchFIRST to crumble.


MARINER HEALTH: Faces Probe Over Death Of Texas Facility Resident
-----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange Commission
on August 6, 2004, C. Christian Winkle, President and Chief
Executive Officer of Mariner Health Care, Inc., discloses that on
July 30, 2004, the company received notice from the Bexar County,
Texas District Attorney's office that one of the company's
facilities, as well as the administrator and director of nursing
for the facility, are the targets of a criminal investigation
involving possible misdemeanor and felony violations of state law.
The investigation involves the death of a hospice resident that
was possibly caused by a medication error.

Mariner has retained criminal counsel to represent it and its
employees with respect to the investigation.  The matter is in the
investigative stage, and Mr. Winkle says that Mariner is not aware
of any formal actions that have been brought at this time.  In the
event a formal action is brought, Mariner intends to vigorously
contest any allegations of misconduct. (Mariner Bankruptcy News,
Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MIRANT CORPORATION: Asks Court to Approve TransCanada Compromise
----------------------------------------------------------------
An important goal of Mirant Corporation and its debtor-affiliates
has been to resolve the issues, claims, and debts in the Canadian
insolvency proceedings of Mirant Canada Energy Marketing, Ltd.,
and Mirant Canada Energy Marketing Investments, Inc., under the
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 as
amended.  The material claims in the Canadian Proceeding were
resolved in a settlement agreement that the Court approved on
April 21, 2004.

Although the Global Settlement Agreement resolved nearly all the
major creditors' issues relating to the Debtors' Canadian assets,
Michelle C. Campbell, Esq., at White & Case, LLP, in Miami,
Florida, notes that the claims of TransCanada PipeLines Limited,
TransCanada Energy Ltd., and TransCanada Gas Service, Inc.,
relating to certain contracts were not resolved, but rather,
reserved for determination at a later date.

                   The TransCanada Transactions

On October 10, 2001, MCEM, MAEMII and the TransCanada Entities
entered into a Purchase and Sale Agreement (Margin Business) under
which MCEM acquired certain TransCanada Energy assets and MAEMII
acquired certain assets of TransCanada Gas.  MCEM purchased from
TransCanada Energy a financial AECO basis swap of 5,000 MMBtu's
per day for NYMEX last day minus $0.34 USD/MMBtu, ending in
October 2004.  The counterparty of the Basis Swap is Engage Energy
Canada, LP.  Engage would not consent to a novation of MCEM for
TransCanada Energy under the Basis Swap.  Thus, TransCanada Energy
continues to be in contractual privity with Engage under the Basis
Swap.  To date, MCEM has performed under the Basis Swap.

Ms. Campbell reports that MAEM assumed the obligations of MAEMII
under the PSA pursuant to that certain Agreement Relating to
Purchase and Sale Agreement (Margin) dated November 30, 2001 by
and among MAEM, MAEMII and TransCanada Gas.  Under a Contribution,
Assignment and Assumption Agreement (Margin) and General
Conveyance (Margin) dated December 1, 2001 between MAEM and
MAEMII, MAEMII transferred the TransCanada Gas Assets to MAEM.

MAEMII and MCEM are jointly and severally liable to the
TransCanada Entities under the PSA and MAEM is liable to the
TransCanada Entities for MAEMII's obligations under the PSA by
virtue of the ARPSA.  Moreover, Mirant Corp. guaranteed the
obligations of the Mirant Entities under the PSA under a Guaranty
dated October 10, 2001.  Mirant Corp., on MCEM's behalf, posted a
$3,356,785 letter of credit to TransCanada PipeLines to support
MCEM's overall transaction activity with TransCanada PipeLines.
The Letter of Credit expires on September 30, 2004.

                  The Mirant Canada Liquidation

On October 2, 2003, Mirant Canada engaged in a sales process
designed to sell its Canadian trading business.  To that end, in
March 2004, Mirant Canada assigned to Tenaska Marketing Canada
certain gas transportation-related contracts identified in the
PSA, with these exceptions:

   (a) The Firm Service Capacity Release to Androscoggin Energy,
       LLC, under Gas Transportation Contract for Firm
       Transportation Service starting November 10, 1999 and
       ending November 1, 2018 for 11,000 mmbtu/day at primary
       delivery point Draicut;

   (b) The Gas Transportation Contract for First Transportation
       Service starting March 9, 1999 and ending October 31,
       2018 between TransCanada Gas and Portland Gas
       Transmission for 4,000 mmbtu/day at primarily delivery
       point Draicut; and

   (c) The Gas Transportation Contract for Firm Transportation
       Service starting November 1, 2018 and ending March 9,
       2019 between TransCanada Gas and Portland Gas
       Transmission for 15,000 mmbtu/day at primary delivery
       point Draicut.

Substantially all of Mirant Canada's assets were liquidated in the
Canadian Proceeding thereby leaving more than $80,000,000 in cash.

At the time of the Global Settlement Agreement, it was believed
that the TransCanada Entities would assert a claim against Mirant
Canada for about $13,500,000 for the anticipated rejection of the
Portland Contracts.  Consequently, an escrow account was
established with $10,800,000 for the benefit of the TransCanada
Entities, pending resolution of the Portland Contracts.
PricewaterhouseCoopers, as monitor in the Canadian Proceedings, is
holding the Funds in the escrow account, which are earning
interest.

                     The TransCanada Claims

On December 15, 2003, the TransCanada Entities filed two proofs of
claim against Mirant Corp.:

   (a) Claim No. 6512 for $103,465,841; and

   (b) Claim No. 6511 for $151,404.

In May 2004, MAEM and MAEMII sought and obtained the Court's
permission to reject the Portland Contracts and the Androscoggin
Contract.  The Debtors subsequently entered into discussions with
TransCanada to resolve issues related to the rejected Contracts
and with respect to the Engage Basis Swap.

                    The Settlement Agreement

The Mirant Entities and the TransCanada Entities have reached an
agreement wherein TransCanada Energy will receive $14,327,292 in
this manner:

   (a) On or before the second business day after the Court
       approves the Settlement agreement, the TransCanada
       Entities will take all steps necessary to draw the full
       amount of the Letter of Credit.  The Letter of Credit
       proceeds will be converted to Canadian dollars at the rate
       of $1 = CN$1.3929, which was the exchange rate as of
       July 15, 2003.  Thus, the Letter of Credit proceeds will
       have a value of CN$4,675,666;

   (b) MCEM will instruct PwC to transfer CN$9,251,626 to
       TransCanada Energy from the Funds;

   (c) PwC has agreed to make the transfer immediately upon
       receipt of a written instruction from MCEM, and PwC
       agreed to immediately instruct its bank to convert the
       Funds to Canadian Dollars sufficient to pay
       CN$9,251,626 on the date that it receives the written
       instruction from MCEM.  If the Letter of Credit proceeds
       is less than the anticipated CN$4,675,666, then MCEM is
       obligated to instruct PwC to transfer additional funds
       from the Funds until TransCanada Energy receives
       CN$13,927,292;

   (d) TransCanada Energy will be entitled to earn interest on
       CN$12,787,292 at a rate per annum equal to the rate
       earned by PwC on the Funds for any amount required to be
       paid, but not paid, from June 15, 2004 until the
       Effective Date;

   (e) No portion of the payments are to be paid from any of the
       Debtors' bankruptcy estates;

   (f) The Agreement provides that CN$1,140,000 of the
       CN$13,927,292 required to be paid under the Agreement
       represents any liability TransCanada Energy may owe to
       Engage under the Engage Basis Swap.  MCEM intends to
       continue to perform the Basis Swap or assign the Basis
       Swap to a creditworthy entity.  The Basis Swap terminates
       on October 25, 2004.  Consequently, the Agreement provides
       for a periodic return of the Basis Swap Funds on these
       dates and amounts:

       -- CN$395,000 on August 25, 2004;

       -- CN$383,000 on September 27, 2004; and

       -- CN$362,000 on October 25, 2004.

       If MCEM assigns the Basis Swap to a creditworthy entity
       prior to termination of that agreement, TransCanada
       Energy is required to return the then-balance of the
       Basis Swap Funds to the Mirant Entities with accrued
       interest;

   (g) The TransCanada Entities will also be allowed a general
       unsecured claim for $2,450,000 against Mirant Corp. in its
       bankruptcy case and will not be required to take any
       further action to substantiate or prove the Unsecured
       Claim; and

   (h) The Mirant Entities and the TransCanada Entities mutually
       release each other from Claims related to damages
       incurred by the TransCanada Entities in connection with
       MAEM and MAEMII's rejection of the Portland Contracts or
       any aspect of the parties' prior business relationship.
       Excluded from the mutual release are:

       -- claims to rights and remedies under the Agreement;

       -- the obligations of the parties under the Agreement;

       -- the obligations of the parties under the Androscoggin
          Contract; and

       -- with respect to Mirant Corp. and MAEM, the debt
          evidenced by the Unsecured Claim.

Accordingly, the Debtors ask Judge Lynn of the U.S. Bankruptcy
Court for the Northern District of Texas to authorize Mirant
Americas to consummate the Settlement Agreement pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedure.

Ms. Campbell relates that given the lengthy terms of the Portland
Contracts, calculation of the damages claim is complicated.  The
parties have disputed not only the method of calculation and the
certainty of damages projected so far into the future, but also
the appropriate discount rate to use.  The Settlement Agreement
resolves that dispute.  Moreover, the Settlement Agreement avoids
the cost of litigation and resolves nearly all of the issues,
except for the claims relating to the Androscoggin Contract.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean.  The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590).  Thomas E. Lauria, Esq., at White & Case LLP represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ML CBO: Moody's Places Caa1-Rated Notes on Watch & May Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed on watch for possible
downgrade the rating of the Class A notes issued by ML CBO VI,
Series 1996-C-2.  Continuing deterioration in par and credit
quality of the underlying portfolio prompted the current action.
Moodys notes that the Class A Overcollateralization Ratio is 60.4%
as of the 7-10-04 noteholder report.  The failure of
overcollateralization coverage tests has led to substantial
redemptions of the Class A Notes.  Although Moody's expects the
deal to continue delevering, this will not be sufficient to
preserve the credit ratings of the Notes prior to today's rating
action.

Rating Action: Watchlist

Issuer: ML CBO VI, Series 1996-C-2

Tranche description: US$172,800,00 Class A Floating Rate
                     Senior Secured Notes Due 2006

Previous Rating: Caa1

New Rating: Caa1 on watch for possible downgrade


NATIONAL CENTURY: Liberty National & Aprahamian Feud over Sale
--------------------------------------------------------------
On July 7, 2004, the U.S. Bankruptcy Court for the District of
Ohio ruled that Liberty National Enterprise, L.P., defaulted under
the Bid Procedures Order for failing to close the sale of the
Lincoln Clinic Property by May 3, 2004.  The Court ordered
Memorial Drive Office Complex, National Century Financial
Enterprises, Inc. debtor-affiliate, to sell the Lincoln Clinic
Property to Mark Aprahamian for $4,525,000 as the second highest
bidder.

Michael D. Bornstein, Esq., at Ricketts Co., in Columbus, Ohio,
contends that the Court's oral ruling did not refer to:

   (a) MDOC's prior non-disclosure of the existence of an
       environmental impact report; or

   (b) the fact that MDOC and Liberty National had mutually
       consented to a new closing date at a purchase price about
       3% less than Liberty National's original bid amount; or

   (c) the fact that even the reduced price was higher than Mr.
       Aprahamian's second place bid.

Accordingly, Liberty National asks the Court to reconsider its
Order approving the sale of the Lincoln Clinic Property to Mr.
Aprahamian.

Mr. Bornstein presents four reasons why the Court should
reconsider its decision:

   (a) Liberty National was not in default.  Closing of the sale
       within three days of the Sale Order becoming final was
       never a hard and fast deadline.  The wording of the Bid
       Procedures Order itself contemplates the possibility of a
       later closing date.  Furthermore, the Asset Purchase
       Agreement and the Sale Order, not the Bid Procedures
       Order, controlled the timing of closing of the Lincoln
       Clinic Property Sale.

   (b) The Court's decision was improperly focused on so called
       additional consideration.  The Court believed that an
       attack was being made on the bidding process by the
       proposal of additional consideration, which was not cash.
       The Court was referring to MDOC's counsel's
       characterization of a proposed settlement of a pending
       appeal between MDOC and Liberty National regarding a
       separate matter as consideration.  The proposed settlement
       of the appeal was not important to the Court's
       consideration of Tri-Yar's Motion to Compel.

   (c) Tri-Yar's request to compel MDOC to proceed with selling
       the Lincoln Clinic Property was in the nature of a
       proceeding to obtain an injunction or other equitable
       protection, as was Mr. Aprahamian's.  Pursuant to Rule
       7001(7) of the Federal Rules of Bankruptcy Procedure, the
       proceeding must be brought as an adversary proceeding,
       rather than as a motion.

   (d) Mr. Aprahamian provided insufficient notice when he was
       asking the Court to order that the Lincoln Clinic Property
       be sold to him.  The Court should have ordered Mr.
       Aprahamian to file an appropriate motion and give proper
       notice, or should have continued the hearing to permit
       interested parties a real opportunity to object.

Mr. Bornstein points out that if a default or breach by any party
occurred, it was a breach by MDOC under the Purchase Agreement for
failing to disclose the EIR.  Under California law, a seller has a
duty to disclose concealed material defects that are not
observable by the buyer.

Liberty National acted reasonably and in good faith when it
discovered MDOC's non-disclosure.  Facing potential administrative
claims against the estate for non-disclosure liability, MDOC
negotiated a price adjustment for $4,350,000 to account for the
EIR non-disclosure and the potential future environmental problems
with the Lincoln Clinic Property.  Liberty National was prepared
to close the sale at that reduced price, but for MDOC's reluctance
to close without a further Court Order.

                            Responses

(1) Tri-Yar Capital, L.L.C.

Larry J. McClatchey, Esq., at Kegler, Brown, Hill & Ritter, in
Columbus, Ohio, relates that Liberty National's motion for
reconsideration is yet another attempt to challenge the integrity
of the bidding process.

The compromise between MDOC and Liberty National for a revised
purchase price of $4,530,000 is a significant departure from the
original successful bid by Liberty National of $4,700,000.  More
importantly, the compromised purchase price exceeds Mr.
Aprahamian's second highest bid merely by $5,000.  The amount is
$20,000 less than the bidding increments enforced at the Auction.
Furthermore, the Bid Procedures contemplate that bids for the
Medical Clinic must be on a "cash" basis -- not a combination of
cash, releases and a reduced purchase price.  Clearly, Liberty is
now attempting to "offer something else" and thereby circumvent
the bidding process.

Tri-Yar participated in the bidding process expecting that the
Bid Procedures were valid and enforceable.  At all times, Tri-Yar
has played by the rules.  Now, Liberty is frustrating the process
and changing the rules on which others relied.  Mr. McClatchey
says that this is not acceptable and challenges the purpose of the
bidding process.

Thus, Tri-Yar asks the Court to deny Liberty National's request
and set a date certain by which MDOC must close the Lincoln Clinic
Property sale to Mr. Aprahamian or the next highest qualified
bidder.

(2) Mark Aprahamian

Michael S. Kogan, Esq., at Ervin, Cohen & Jessup, LLP, in Beverly
Hills, California, contends that Liberty National is at fault for
its predicament, has attempted to renegotiate one court order, and
has failed to attend the hearing in which the protection requested
by Mr. Aprahamian and Tri-Yar was granted by the Court.  Liberty
cannot now ask the Court to reconsider the July 7, 2004 Court
Order when it has offered no plausible reason for the change.

Liberty's new and renegotiated offer is $170,000 less than its
original offer, and $5,000 greater than Mr. Aprahamian's
legitimate offer.  Liberty only offered the renegotiated amount
after learning that Mr. Aprahamian would go forward with his
Court-approved offer.  Liberty is not playing fair with the other
Qualified Bidders, the Court and creditors of the estate, Mr.
Kogan remarks.  Accepting Liberty's new bid would upset the
expectations of those who thought the bidding was at an end.
Furthermore, it may in the long term undermine the confidence in
judicial sales and discourage prospective purchasers from making
their best offers in a timely manner.

Mr. Kogan also points out that Liberty's assertion that MDOC
failed to disclose the EIR is not supported by any evidence.  The
only evidence Liberty has filed is that it failed to open an
electronic mail message from MDOC to Liberty informing of the EIR
before the Auction.

Mr. Kogan adds that there is also no evidence that:

   (a) the information in the EIR is material to the value of the
       property;

   (b) MDOC had knowledge that the EIR was not discoverable by
       Liberty;

   (c) MDOC had the intent to induce Liberty to act by the
       alleged non-disclosure;

   (d) Liberty was induced by the alleged non-disclosure; and

   (e) Liberty suffered any damage as a result of the alleged
       non-disclosure.

Liberty has also waived its right to seek reconsideration when it
failed to appear at the July 7, 2004 hearing.  Any argument that
Liberty could have made in defense of its delay and violation of
the Bidding Procedure Order, Sale Order and Purchase Agreement
should have been made at the July 7th hearing, Mr. Kogan
maintains.

                     Not True, Says Liberty

Michael D. Bornstein, Esq., at Ricketts Co., in Columbus, Ohio,
argues that Mr. Aprahamian's contentions are inaccurate.  Mr.
Bornstein notes that:

   (a) The EIR was not sent to Liberty National until April 16,
       2004, the date of and after the time of the Sale Hearing
       and while Liberty National's representative was in Ohio.
       The Auction Sale in which Liberty National prevailed was
       on April 15, 2004;

   (b) The leading treatise on California real estate law
       confirms that an "as is" provision does not insulate a
       seller, which has failed to disclose non-observable
       defects; and

   (c) The California Health & Safety Code imposes an additional
       statutory duty of disclosure on owners of non-residential
       real property when they wish to sell a property.

The issue is not whether Liberty National has proven all elements
of a fraud claim.  Mr. Bornstein emphasizes that the issue is
whether the issue of the EIR nondisclosure raised sufficient
concerns in that a discount of less than 3% of the purchase price
by MDOC, in order to avoid the risk and expense of litigating that
question, was in bad faith.

In negotiating for an agreement of the issues raised by the late
disclosure of the EIR, Liberty National and MDOC were exercising
their prerogative, under the express terms of the Asset Purchase
Agreement and the Bid Procedures Order, to extend the closing date
beyond the third day after the Sale Order became final and non-
appealable.  Their decision to extend the closing was done
reasonably and in good faith, as result of the late disclosure of
the EIR.

Mr. Bornstein maintains that Liberty National did not waive its
right to seek reconsideration.  Contrary to Mr. Aprahamian's
assertions, Liberty National did appear in opposition to the Tri-
Yar Motion to Compel by filing its written opposition.

(3) Unencumbered Assets Trust

Charles M. Oellermann, Esq., at Jones Day Reavis & Pogue, in
Columbus, Ohio, notes that Liberty National's request for
reconsideration makes certain statements regarding MDOC's actions,
the environmental condition of the Lincoln Clinic Property, and
the negotiations between MDOC and Liberty National
with respect to the property.

Because they do not believe those specific issues are before the
Court, the Unencumbered Assets Trust and MDOC do not respond to
these statements but instead reserve their rights in the event
that a dispute regarding any of these matters were ever to arise
between the parties.

On July 14, 2004, the Trust's counsel received a letter from S.
Sophie Nosrati, Esq., which "advised that this office represents
clients who have expressed a genuine interest in purchasing [the
Medical Clinic] at an all-cash purchase price considerably higher
than any of those currently under consideration through the
bankruptcy court."

Five days later, on July 19, 2004, the Trust's counsel received a
"Letter of Intent" from an agent for Soleiman and Steve Sepehr
Ghalili, Inc., offering to purchase the Medical Clinic for
$5,126,000 in cash.

In light of these developments, the Trust appears to have several
parties interested in purchasing the Lincoln Clinic Property at
purchase prices ranging from $4,525,000 to $5,126,000.  Some of
those were present at the original property auction.  Some were
not.  These parties have yet to be assembled to competitively bid
on the Lincoln Clinic Property to achieve a single highest and
best offer.

Given the recently submitted higher offers and the complex
procedural history surrounding the property, the Trust asks the
Court to enter an order that will provide direction as to means to
close the sale of the Lincoln Clinic Property in a manner that
will maximize the recovery for creditors of the estates.

Specifically, the Trust asks the Court to direct the parties to
either:

   (a) close the sale as ordered by the Court on July 7, 2004;

   (b) close a sale to Liberty National on specified terms; or

   (c) implement an alternative procedure where the new and
       higher offers can be considered.

With their Reconsideration Motion still pending before the Court,
pursuant to Section 158 of the Judicial Procedures Code, Liberty
National Enterprise, L.P., will take an appeal to the Bankruptcy
Appellate Panel regarding the Bankruptcy Court Order compelling
Debtor Memorial Drive Office Complex to sell the Lincoln Medical
Clinic Property to Mark Aprahamian.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers.  The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. D. Ohio Case No. 02-65235).  Paul E. Harner, Esq., Jones,
Day, Reavis & Pogue represents the Debtors in their restructuring
efforts. (National Century Bankruptcy News, Issue No. 44;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL INDUSTRIAL: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: National Industrial Contractors, Inc.
        3411 Integrity Drive
        Garner, North Carolina 27529

Bankruptcy Case No.: 04-02909

Type of Business: The Debtor is engaged in the business of
                  industrial construction and maintenance.

Chapter 11 Petition Date: August 10, 2004

Court: Eastern District of North Carolina (Raleigh)

Judge: A. Thomas Small

Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
                  Stubbs & Perdue, P.A.
                  P.O. Drawer 1654
                  New Bern, NC 28563
                  Tel: 252-633-2700

Estimated Assets: $100,000 to $500,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Cincinnati Insurance Co.                    $87,439

Stewart Stainless Steel                     $81,979

Specialty Products                          $62,085

Employment Security Comm.                   $58,638

Trisure Corporation                         $34,882

Avian, Inc.                                 $34,197

Resolite Frp Composites                     $31,820

Triangle Staffing                           $24,545

Stromberg Metal Works Inc.                  $22,494

Rural Plumbing & Heating                    $18,452

S&W Ready Concrete Co.                      $16,708

Carolina Process Piping                     $14,440

Advanta Business Cards                      $11,133

Allied Computer                             $10,670

BWI Distribution, Inc.                       $9,761

Capps Industrial Supply                      $9,599

Machine & Welding Supply                     $8,619

Country Cupboard #5                          $7,375

Fisher & Co., CPAS                           $6,717

BP Oil Products of NC                        $6,476


NEXPAK CORPORATION: Employs Logan & Company as Claims Agent
-----------------------------------------------------------
Nexpak Corporation and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the Northern District
of Ohio to appoint Logan & Company, Inc., as the official claims
and noticing agent in their chapter 11 cases.

The large number of creditors and other parties in interest
involved in the Debtors' chapter 11 cases may impose heavy
administrative and other burdens upon the Court and the Office of
the Clerk of the Court.  To relieve the Court and the
Clerk's Office of some of these burdens, Logan & Company will:

   (a) prepare and serve required notices in this chapter 11
       case, including:

         i) notice of the commencement of the case and the
            initial meeting of creditors under section 341(a) of
            the Bankruptcy Code;

        ii) notice of any claims bar date;

       iii) notice of any objections to claims;

        iv) notice of any hearings on approval of a disclosure
            statement and confirmation of the plan or other plan
            of reorganization; and

         v) such other notices as the Debtor or the Court may
            deem necessary or appropriate for an orderly
            administration of this case;

   (b) docket and maintain copies of all proofs of claim and
       proofs of interest;

   (c) maintain and transmit to the Clerk's Office the claims
       registers and related claims information;

   (d) maintain an up-to-date mailing list for all entities that
       have filed proofs of claim, proofs of interest or notices
       of appearance;

   (e) provide access to the public for examination of copies of
       the proofs of claim or proofs of interest without charge
       during regular business hours;

   (f) record all transfers of claims it receives pursuant to
       Bankruptcy Rule 3001(e);

   (g) provide such other claims processing, noticing and
       related administrative services as may be requested from
       time to time by the Debtors and agreed upon by Logan.

   (h) prepare the Debtor's schedules of assets and liabilities,
       statements of financial affairs and master creditor lists
       and any amendments thereto;

   (i) reconcile and resolve claims;

   (j) prepare, mail and tabulate ballots of certain creditors
       and other related services for the purpose of voting to
       accept or reject a plan or plans of reorganization; and

   (k) provide technical support in connection with the
       foregoing.

The Debtors agree to pay Logan & Company a $10,000 retainer and
customary transaction fees.  Logan & Company's Service Agreement
filed with the Bankruptcy Court does not disclose the specific
rates.

Headquartered in Uniontown, Ohio, NexPak Corporation, manufactures
and supplies  standard and custom packaging for DVD, CD, video,
audio, and professional media formats.  The Company filed for
chapter 11 protection on July 18, 2004 (Bankr. N.D. Ohio Case No.
04-63816).  Ryan Routh, Esq., and  Shana F. Klein, Esq., at Jones
Day represent the Company in its restructuring efforts.  When the
Company filed for protection from its creditors it reported
approximately $101 million in total assets total debts
approximating $209 million.


NEXPAK CORP: Gets Okay to Draw $8 Mill. on DIP Financing Facility
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, gave its stamp of approval to Nexpak
Corporation, and its debtor-affiliates' request for interim
authority to borrow up to $8,000,000 under a Postpetition Secured
Superpriority Financing agreement.  The Debtors will use the money
to finance the ongoing operation of their businesses.  Foothill
Group, Inc., Highland Capital Management, L.P., are the DIP
Lenders.

The Debtors disclose that, as of July 19, 2004, they owe Foothill
and Highland $145,230,174 plus interest, fees, costs and expenses.
These Prepetition Obligations are secured by valid, enforceable,
duly perfected liens and security interests granted to the Lenders
on the Prepetition Collateral.

The Court has determined that allowing the Debtors to use Cash
Collateral and Interim Financing is necessary to avoid immediate
and irreparable harm to their assets, businesses and business
relationships.  Presently, the Debtors are unable to obtain
emergency unsecured credit allowable under Section 364(a) or (b)
of the Bankruptcy Code, or secured credit under Section 364(c)
or (d).

The interim $8 million borrowing runs through August 16, 2004,
when the Debtors will return to Court seeking final approval of a
DIP Facility consists of a priming credit facility of up to
$37,720,168 comprised of:

   (i) a $14,500,000 revolving line of credit;

  (ii) a $7,500,000 multi-advance project finance term loan; and

(iii) a $15,720,168 term loan to be used to pay off the
       Prepetition Priming Term Loan after the entry of the
       Final Order to provide additional adequate protection for
       the Prepetition Priming Lenders.

The DIP Facility Borrowing Base, will be equal to:

   (a) 85% of eligible accounts receivable owned by the Debtors;
       plus

   (b) 50% of finished goods, raw materials and packaging
       materials constituting eligible inventory owned by the
       Debtors; minus

   (c) reserves established by the DIP Lenders in their
       reasonable credit judgment.

Borrowings under the DIP Facility will terminate, at the earliest
of:

   (i) November 26, 2004, unless extended by the Debtors and the
       DIP Lenders through December 31, 2004;

  (ii) an Event of Default;

(iii) the effective date of a confirmed plan of reorganization;

  (iv) the closing date of any sale of all or substantially all
       of the Debtors' assets;

   (v) the entry of an order by the Court granting stay relief
       permitting foreclosure of assets of the Debtors with a
       value greater than $500,000; or

  (vi) the entry of an order of dismissal or conversion of
       these chapter 11 cases.

The Debtors will pay these fees to the DIP Lenders:

   (i) $750,000 Closing Fee;

  (ii) $5,000 Monthly Administration Fee;

(iii) $250,000 Work Fee;

  (iv) $500,000 Structuring Fee;

   (v) Unused Line Fee of 2% per annum on every dollar not
       borrowed;

  (vi) Audit Fees of $950 per day per auditor employed by the
       Lenders; and

(vii) $250,000 Extension Fees.

As adequate protection for the Prepetition Secured Lenders:

   (a) the prepetition debt is subordinate to the liens of the
       DIP Lenders under the proposed DIP Facility;

   (b) the Debtors will pay interest upon, and ultimately
       satisfy in full, the Prepetition Priming Loans by making
       payments to the Lenders as adequate protection under
       Section 361(1) of the Bankruptcy Code;

   (c) the Prepetition Secured Lenders will be granted the
       Adequate Protection Liens to compensate them for the
       priming of their lien position and the use of their cash
       collateral and the use, sale or lease of other
       collateral; and

   (d) the Prepetition Secured Lenders will receive the
       superpriority Adequate Protection Claims.

Headquartered in Uniontown, Ohio, NexPak Corporation, manufactures
and supplies  standard and custom packaging for DVD, CD, video,
audio, and professional media formats.  The Company filed for
chapter 11 protection on July 18, 2004 (Bankr. N.D. Ohio Case No.
04-63816).  Ryan Routh, Esq., and  Shana F. Klein, Esq., at Jones
Day represent the Company in its restructuring efforts.  When the
Company filed for protection from its creditors it reported
approximately $101 million in total assets total debts
approximating $209 million.


ORANGE COUNTY: Moody's Downgrades Housing Bond Rating to Ba1
------------------------------------------------------------
Moody's has downgraded the rating on the Orange County Housing
Finance Authority's $7.5 million of outstanding Multifamily
Housing Revenue Bonds, Series 2000A (Maitland Oaks and Hollowbrook
Apartments) to Ba1 from Baa3.  The outlook remains negative.  The
change in rating is primarily due to the continued weakening of
the property's financial condition.

These Series 2000 A Bonds continue to maintain MBIA's bond
insurance and carry MBIA's current financial strength rating of
Aaa.  In conjunction with the delivery of these bonds in 2000, the
Issuer delivered Series B senior bonds which were paid in full on
July 1st of this year and subordinate bonds currently outstanding
in the amount of $2.1 million (Series C and D), which Moody's does
not rate.

Maitland Oaks and Hollowbrook Apartments are 100 unit and 144 unit
properties, respectively, located in Orlando, Florida.  The
project's continuing weak financials are attributable in large
part to the overall softening of the Orlando rental market that
has resulted in higher vacancy rates than were originally
underwritten and significantly higher concessions being offered to
attract tenants.  Although the weighted occupancy rate of 92.6% at
the end of June 2004 was a moderate increase from the 87% rate at
the end of December 2003, this increase has not yet translated
into corresponding financial improvement, particularly given the
high level of rent concessions.

The property's financial condition continues to be under some
stress, although the unrated subordinate bonds have borne the
brunt of the repercussions.  While fiscal year 12/31/2002 (the
last year of available audited financials) debt service coverage
on the senior bonds was 1.43x, unaudited financials for both
fiscal year 2003 and the first six months of 2004 show senior debt
service coverage down significantly at approximately 1.19x for
2003 and just over one time for the first six months of 2004.
While audited financials would likely prove more accurate,
according to the property manager, there is a dispute between the
owner and manager regarding the audit.  As a result, it is unclear
when the next audited financials will become available.

While the debt service reserve has not been tapped for the senior
bonds, the debt service reserve pledged to the unrated subordinate
bonds has been tapped three times thus far: in July 2003 for
approximately $49,000, again in January, 2004 for $94,153.77, and
again in July 2004 for $53,346.70 for a total of just under
$200,000. Moody's will continue to monitor the property's monthly
occupancy rates, expenses, and debt service coverage closely.
Outlook

The current outlook on these bonds remains negative based on the
fundamental credit factors.


OWENS CORNING: Plans to Produce Laminated Shingles in Illinois
--------------------------------------------------------------
Owens Corning (OTC Bulletin Board: OWENQ) is upgrading its Summit,
Illinois, facility to include the production of laminated shingles
in addition to standard three-tab roofing products.  With the
investment, the plant joins the company's fast-growing nationwide
network of laminated shingle manufacturing facilities to meet
surging customer demand for laminates, which now represent nearly
60 percent of the residential roofing market.  The new line will
begin operation in the fourth quarter and benefit customers
primarily in the Midwest -- complementing existing regional
laminate production plants in Minnesota,
Indiana and Ohio.

"Our continual investment in laminate capacity is a clear
reflection of our commitment to ensuring our customers are
successful in the marketplace," said Brian Chambers, Owens Corning
vice president and general manager of residential roofing.

Owens Corning offers a full spectrum of roofing products which
includes the Oakridge(R) Series of shadow and deep shadow
architectural shingles, and, to meet increasing homeowner demand
for more aesthetically appealing and higher performance roofing
systems, the recently introduced Berkshire(R) Collection of slate-
look shingles, Woodcrest(TM) and Woodmoor(TM) Collection of shake-
look shingles, and WeatherGuard(R) HP shingles with TruLoc(TM)
granule retention technology for severe weather climates.

This news comes as Owens Corning continues expanding capacity
worldwide to meet strong demand for its products.  In recent
months, the Company has announced plans to build or expand foam,
fiberglass insulation and shingle plants across North America and
Asia.

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts.  At
June 30, 2004, the Company's balance sheet shows $7.3 billion in
assets and a $4.3 billion stockholders' deficit.  (Owens Corning
Bankruptcy News, Issue No. 81 Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PARMALAT GROUP: Milk Products Bids Should be in by September 1
--------------------------------------------------------------
In connection with proposed sale of Milk Products of Alabama, LLC,
a Parmalat Group North America debtor-affiliate, of its Decatur,
Alabama business to National Dairy Holdings, LP, for
US$19.7 million, subject to higher and better offers, U.S.
Bankruptcy Court for the Southern District of New York ruled that:

   * All bids are due on September 1, 2004;

   * If necessary, Milk Products will conduct an auction on
     September 13; and

   * The Court will hold a Sale Hearing on September 15 at 10:00
     a.m.

Objections to the sale of the Alabama Business, the assumption and
assignment of any Assumed Contracts, or the Cure Amounts must be
filed by September 8, and must state with specificity the nature
of the objection.  Objections will be heard by the Court at the
Sale Hearing.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-
11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts.  On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 25 & 27; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PEGASUS SATELLITE: Has Until November 1 to Decide on Leases
-----------------------------------------------------------
U.S. Bankruptcy Court for the District of Maine extends the time
within which Pegasus Satellite Communications, Inc. and its
debtor-affiliates may assume or reject any leases, subleases or
other agreements that may be considered unexpired non-residential
real property leases, through and including November 1, 2004.

Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Case No. 04-20889) on June 2,
2004.  Larry J. Nyhan, Esq., James F. Conlan, Esq., and Paul S.
Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and Leonard M.
Gulino, Esq., and Robert J. Keach, Esq., at Bernstein, Shur,
Sawyer & Nelson, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $1,762,883,000 in assets and $1,878,195,000
in liabilities. (Pegasus Bankruptcy News, Issue No. 7 & 8;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PJK INC: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: PJK, Inc.
        dba Dutch Inn
        308 South Walton Drive
        Benson, North Carolina 27504

Bankruptcy Case No.: 04-02910

Type of Business: The Debtor operates a hotel in Johnston County,
                  North Carolina.

Chapter 11 Petition Date: August 10, 2004

Court: Eastern District of North Carolina (Raleigh)

Judge: A. Thomas Small

Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
                  Stubbs & Perdue, P.A.
                  P.O. Drawer 1654
                  New Bern, NC 28563
                  Tel: 252-633-2700

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 3 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Capital Outdoor Inc.                         $3,200

EcoLab                                         $521

Fleet Business Credit Card                     $348


PNC MORTGAGE: Fitch Affirms Low B-Rating on 2 Certificate Classes
----------------------------------------------------------------
Fitch Ratings upgrades PNC Mortgage Acceptance Corp.'s commercial
mortgage pass-through certificates, series 1999-CM1 as follows:

   -- $39.9 million class A-2 to 'AAA' from 'AA+';
   -- $34.2 million class A-3 to 'AA-' from 'A+';
   -- $13.3 million class A-4 to 'A+' from 'A'.

In addition, Fitch affirms the following classes:

   -- $69.3 million class A-1A at 'AAA';
   -- $433.7 million class A-1B at 'AAA';
   -- Interest-only class S at 'AAA';
   -- $24.7 million class B-1 at 'BBB+';
   -- $9.5 million class B-2 at 'BBB';
   -- $10.5 million class B-6 at 'B+';
   -- $5.7 million class B-8 at 'B-'.

Fitch does not rate classes B-3, B-4, B-5, B-7, C, and D
certificates.

The rating upgrades reflect the increased credit enhancement and
overall loan performance since issuance.

Midland Loan Services, the master servicer, collected year-end
2003 financials for 91% of the pool balance.  Based on the
information provided, the resulting YE 2003 weighted average debt
service coverage ratio (DSCR) was 1.46 times (x) compared to 1.54x
as of YE 2002 for the same loans, and 1.43x at issuance.

Currently, two loans (0.72%) are in special servicing.  The
largest specially serviced loan is secured by a 158-unit
multifamily complex in Dallas, Texas and is currently 30 days
delinquent.  The special servicer is considering a one-year
forbearance agreement to allow the borrower time to stabilize the
property.

The second specially serviced loan (0.17%) is secured by an 81-
unit apartment complex in Monroe, Louisiana.  The borrower has
brought the loan current and the loan is now pending return to the
master servicer, provided timely payments of debt service are
made.

Fitch continues to monitor the high percentage of Fitch loans of
concern (8.8%) in the pool.  They include loans with DSCRs below
1.0x and loans with substantial drops in occupancy.  The largest
loan of concern (0.98%) is secured by a multifamily property in
Dallas, Texas.  Occupancy has declined to 86% as of YE 2003 from
91% at issuance.  The YE 2003 DSCR declined to 0.98x, compared to
1.10x as of YE 2002.  Performance has deteriorated as a result of
weakness in the property's submarket.

The second largest loan of concern (0.75%) is secured by a hotel
property located in Eden Prairie, Minnesota.  The property has
seen its performance deteriorate since issuance.  DSCR for the
property has declined to 0.94x as of YE 2003 from 1.57x at
issuance. Occupancy at the hotel as of YE 2003 was 76%.

Fitch will continue to monitor the performance of these loans of
concern.  If performance deteriorates, Fitch may re-visit the
ratings of classes B-6 and B-8.


PRIMUS KNOWLEDGE: Inks Approx. $30MM All-Stock Deal with ATG
------------------------------------------------------------
ATG (Art Technology Group, Inc. (Nasdaq: ARTG)) the software
provider behind the Web's richest customer experiences and Primus
Knowledge Solutions, Inc. (Nasdaq: PKSI), an award-winning
customer service software provider, reported a definitive
agreement for ATG to acquire Primus.

Under the terms of the all stock deal, the transaction is valued
at approximately $30 million to $33 million, based upon ATG's
closing stock price as of August 9, 2004.  For the 12-month period
ended June 30, 2004, the two companies had combined revenue of
more than $90 million.  Cost synergies between the two companies
are expected to result in between $10 million and $15 million in
annual savings beginning in 2005. The transaction is expected to
close during the fourth quarter of 2004 and be accretive to ATG's
forecasted results for the full year 2005.

ATG's industry-leading software for online commerce and marketing
combined with Primus' award-winning customer service software
solutions will create one of the industry's largest online
commerce and service software companies.  The combination will
produce the most complete consumer-facing platform to work
seamlessly through Web, email, call center, and other channels.

"Companies want to market to, sell to and service their customers
through a variety of channels and provide the most seamless,
integrated experience for these customers," said Bob Burke,
president and CEO of ATG.  "Combining Primus' products and
technical expertise with ATG creates an e-business powerhouse,
with the breadth of technology and the critical mass that greatly
enhances our ability to provide complete customer experience
solutions across all channels."

ATG delivers a rich customer experience through integrated
customer-facing marketing, selling and service applications. ATG
software solutions include:

   -- The commerce application used by more high-end Web sites
      than any other

   -- The # 1 Scenario Personalization solution according to
      the Information Management Association.  ATG Scenario
      Personalization SM is used by top performing Web sites
      including American Airlines, AT&T Wireless, Fidelity
      Investments, InterContinental Hotels Group (ranked the Best
      International Hotel Site), Neiman Marcus, and Wells Fargo to
      manage customer-facing business processes

   -- Marketing solutions that uniquely integrate email and Web
      interactions, ranked among the top four in the industry by
      Gartner

   -- Customer service technology that provides information that
      is more intelligent, personal and relevant

Primus is a recognized leader in self- and assisted-service
technologies. Its software solutions include:

   -- The highest-ranking solution in Web Self-Service suites from
      Gartner

   -- Advanced email response management technology ranked # 1 by
      Gartner

   -- Extensive knowledgebase and natural language processing
      search technology supporting call centers, help-desk staff,
      field service workers, wireless users and self-service sites

   -- Call center problem resolution technology integrated with
      major CRM suites such as Siebel, PeopleSoft and Remedy

"The combination of ATG's commerce and marketing solutions with
Primus' award-winning customer service and support technologies is
a powerful and natural fit," said Michael Brochu, chairman,
president and CEO of Primus.  "This joint offering will provide
enterprises with the industry's most integrated customer
experience solution to power their e-business initiatives and is a
win-win for our customers, shareholders, employees, and partners."

The acquisition creates a number of synergies on both the top and
bottom line.  The opportunity to sell integrated commerce and
service solutions into each company's respective customer base
provides ATG with significant revenue growth potential. On the
expense side, the combination is expected to generate between $10
million and $15 million in annual savings beginning in 2005,
through workforce synergies, facilities consolidation and the
merger of accounting, legal and regulatory functions.

"Consolidation in the eService market is necessary as enterprises
are looking for integrated multi-channel solutions that leverage
all aspects of the customer service and support continuum," said
Esteban Kolsky, senior research analyst, Gartner, Inc. "The
combination of e-commerce and e-marketing with self- and assisted-
service software solutions creates a necessary offering that
enterprises today require to enhance the overall customer
experience."

                     Terms of the Agreement

Under the terms of the agreement, ATG is acquiring all of the
outstanding shares of Primus.  Upon completion of the transaction
Primus shareholders are expected to own approximately 30 percent
to 32 percent of the combined company's outstanding stock on a
fully diluted basis.  The transaction is expected to be tax-free
to Primus shareholders.  Based upon ATG's latest closing stock
price, and assuming expected exchange ratios in the range of
1.2976 to 1.4169 ATG shares for each diluted share of Primus, the
transaction is valued at approximately $30 million to $33 million.
The exchange ratio is subject to adjustment within this range
based upon Primus' achievement of specified minimum cash and
working capital requirements at closing, but in no event will the
exchange ratio be less than 1.2976 ATG shares for each diluted
share of Primus.

All directors and executive officers of Primus and certain other
shareholders, owning in aggregate approximately 14.6% of Primus'
outstanding shares, have signed an agreement to vote their shares
in favor of the transaction.  Both Primus' and ATG's boards of
directors have unanimously approved the transaction.  The
transaction requires the approval of shareholders of both
companies.  Pending legal and regulatory review and shareholder
approval, the transaction is expected to close during the fourth
quarter of 2004.

As part of the transaction, ATG anticipates that it will be adding
two members to its board of directors, bringing the total to nine
board members.  It is anticipated that Michael Brochu and Daniel
Regis, chairman of Primus' audit committee, will become members of
the board of directors of ATG.

SG Cowen is acting as exclusive financial advisor to ATG, and
Broadview is acting as financial advisor to Primus in connection
with this transaction.

                        Financial Summary

The combined company is anticipated to generate more than
$100 million in revenue for 2005 and is expected to be both
profitable and cash flow positive in 2005.

                            About ATG

ATG (Art Technology Group, Inc.) delivers innovative software to
help high-end consumer-facing companies create a richer, more
adaptive interactive experience for their customers and partners
online and via other channels.  ATG has delivered category-leading
e-business solutions to many of the world's best-known brands
including Best Buy, Kingfisher, Neiman Marcus, Target, Fidelity
Investments, Friends Provident, Merrill Lynch, Wells Fargo, A&E
Networks, Warner Music, AT&T Wireless, France Telecom, Philips,
Procter & Gamble, Hewlett-Packard, American Airlines,
InterContinental Hotels Group, US Army, and US Federal Aviation
Administration.  The company is headquartered in Cambridge,
Massachusetts, with additional locations throughout North America,
Europe, and Asia.  For more information about ATG, visit
http://www.atg.com/

               About Primus Knowledge Solutions, Inc.

Primus Knowledge Solutions develops award-winning software that
enables companies to provide a superior customer experience via
contact centers, help desks, Web self-service, and electronic
communication channels.  Primus technology powers every
interaction with knowledge to increase customer satisfaction and
reduce operational costs.  The company continues to receive
industry accolades for its robust product platform, including a
2004 CRM Excellence Award and 2004 Users Choice Award for
Primus(R) KnowledgeCenter, and "Strong Positive" ratings from
Gartner, the leading provider of research and analysis on global
IT, in both the Web Self-Service Gartner MarketScope for 1H04 and
the ERMS Gartner MarketScope for 1H04.  In 2003, Primus received
the STAR Award for "Best Support Technology Vendor" from the
Service & Support Professionals Association (SSPA), was recognized
for its trend-setting products and named one of the "100 Companies
that Matter in Knowledge Management" by KMWorld magazine, and
received the CRM Excellence Award from the editors of Customer
Interaction Solutions magazine.  Global organizations such as
Allied Irish Bank, The Boeing Company, CompuCom, EMC, Ericsson,
Inc., Fujitsu Limited, Inc., IBM, HSBC, Orange, Motorola, 3Com,
and T-Mobile rely on Primus technology to enhance their customer
service and support initiatives.  Visit http://www.primus.com/for
more information.

                         *     *     *

                      Liquidity Concerns

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, Primus
Knowledge Solutions, Inc., reports:

"Our operations have historically been financed through issuances
of common and preferred stock.  For the six-month period ended
June 30, 2004, we incurred a net loss of approximately $5.1
million and we utilized cash in our operating activities of
approximately $4.6 million.  At June 30, 2004, we have working
capital (current assets minus current liabilities, excluding
deferred revenue) of approximately $7.1 million.  Our management
believes it has sufficient resources to continue as a going
concern through at least June 30, 2005.  Management plans to fund
our growth by generating sufficient revenue from customer
contracts; if they are unable to do so, management would seek to
further reduce operating costs in an attempt to provide positive
cash flows from operations.  There can be no assurance that we
will be able to generate sufficient revenue from customer
contracts, or further reduce costs sufficiently, to provide
positive cash flows from operations.  If we are not able to
generate positive cash flows from operations, we will need to
consider alternative financing sources.  Alternative financing
sources may not be available when and if needed by us or on
favorable terms."


QWEST COMMS: Offers to Buy $750 Million of 7.20% Notes for Cash
---------------------------------------------------------------
Qwest Communications International Inc.'s (NYSE: Q) Qwest
Corporation subsidiary is offering to purchase for cash any and
all of its $750 million aggregate principal amount of 7.20% notes
due November 1, 2004.

Holders who validly tender their notes at or prior to 5:00 p.m.
EDT, on Tuesday, August 24, 2004 (the Early Participation Payment
Deadline), will receive total consideration of $1,009.40 per
$1,000 principal amount of notes accepted for purchase, consisting
of a purchase price of $989.40 per $1,000 principal amount of
notes and an early participation payment of $20 per $1,000
principal amount of notes (the Early Participation Payment).
Holders who validly tender their notes at or prior to the Early
Participation Payment Deadline will receive payment on or about
the first business day following the Early Participation Payment
Deadline.  Tenders of notes may be withdrawn only prior to 5:00
p.m. EDT on Early Participation Payment Deadline.

The offer is scheduled to expire at midnight EDT on Wednesday,
September 8, 2004, unless extended or earlier terminated (the
Expiration Time).  Holders who validly tender their notes after
the Early Participation Payment Deadline and at or prior to the
Expiration Time will only receive the purchase price of $989.40
per $1,000 principal amount of notes accepted for purchase and
will not be entitled to receive the Early Participation Payment.
Payment for Notes tendered after the Early Participation Payment
Deadline and at or prior to the Expiration Time will be made on or
about the first business day following the Expiration Time.  All
holders whose notes are accepted for payment in the offer will
also receive accrued and unpaid interest up to, but not including,
the applicable date of payment for the notes.

The offer is subject to the satisfaction of certain conditions,
including the completion of the private offering of $500 million
aggregate principal amount of new QC debt securities launched
simultaneously with this offer.  The offer is not subject to the
receipt of any minimum amount of tenders.

The complete terms and conditions of the offer are set forth in an
offer to purchase that is being sent to holders of notes. Copies
of the Offer to Purchase and Letter of Transmittal may be obtained
from the Information Agent for the Offer, Global Bondholder
Services Corporation, at (866) 470-3500 (US toll-free) and (212)
430-3774 (collect).

This announcement is not an offer to purchase or a solicitation of
an offer to purchase any securities.  The offer will be made
solely by the Offer to Purchase dated, August 11, 2004 and the
related letter of transmittal.

Lehman Brothers and Goldman, Sachs & Co. are the Dealer Managers
for the Offer.  Questions regarding the Offers may be directed to
Lehman Brothers, Liability Management Group at (800) 438-3242
(toll-free) and (212) 528-7581 or Goldman, Sachs & Co., Credit
Liability Management Group, at (800) 828-3182 (toll-free) and
(212) 357-3019.

                           About Qwest

Qwest Communications International Inc. (NYSE:Q) is a leading
provider of voice, video and data services. With more than 40,000
employees, Qwest is committed to the "Spirit of Service" and
providing world-class services that exceed customers' expectations
for quality, value and reliability.  For more information, visit
the Qwest Web site at http://www.qwest.com/

Qwest's June 30, 2004, balance sheet shows a stockholders' deficit
totaling $1,909,000,000 -- swelling 53% from the $1,251,000,000
shareholder deficit reported at March 31, 2004.


QWEST COMMS: Subsidiary Offering $500 Mil. of New Debt Securities
-----------------------------------------------------------------
Qwest Communications International Inc.'s (NYSE: Q) Qwest
Corporation subsidiary is offering an aggregate principal amount
of $500 million of debt securities in a private placement to be
conducted pursuant to Rule 144A under the Securities Act of 1933,
as amended.  The net proceeds of the offering will be used for
general corporate purposes including funding or refinancing QC
investments in telecommunications assets.

This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, securities.  Any offers of the
securities will be made only by means of a private offering
circular.  The notes have not been registered under the Securities
Act of 1933, as amended, or the securities laws of any other
jurisdiction and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.

                           About Qwest

Qwest Communications International Inc. (NYSE:Q) is a leading
provider of voice, video and data services. With more than 40,000
employees, Qwest is committed to the "Spirit of Service" and
providing world-class services that exceed customers' expectations
for quality, value and reliability.  For more information, visit
the Qwest Web site at http://www.qwest.com/

Qwest's June 30, 2004, balance sheet shows a stockholders' deficit
totaling $1,909,000,000 -- swelling 53% from the $1,251,000,000
shareholder deficit reported at March 31, 2004.


QWEST CORPORATION: Fitch Rates New $500M Unsecured Notes at BB
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to $500 million of 7-year
senior unsecured notes issued by Qwest Corporation.  The notes
will rank equally with other Qwest Corporation debt.  Qwest
Corporation is an indirect wholly owned subsidiary of Qwest
Communications International, Inc.  The proceeds from this
issuance together with available cash on hand, positions Qwest
Corporation to fund the tender announced by the company for Qwest
Corporation's $750 million senior unsecured notes due November
2004.  As of the end of the second quarter of 2004, Qwest
Corporation had approximately $7.59 billion of debt outstanding.
The Rating Outlook for Qwest Corporation, Qwest Communications and
its subsidiaries is Stable.

Because Qwest Corporation operations and cash flows are so highly
integrated into that of its ultimate parent, Qwest Communications,
Fitch links Qwest Corporation's rating to Qwest Communications.
Fitch rates Qwest Communications's, senior unsecured debt 'B'.
The debt at Qwest Corporation is the highest ranking within the
consolidated Qwest Communications debt structure, and Fitch's 'BB'
senior unsecured rating reflects the debt's proximity to the
valuable access lines and strong recovery prospects.  Overall,
Fitch's ratings reflect the strong cash flow generated by and the
market position of Qwest Corporation's local-exchange business,
reduced debt levels and improved liquidity position.  Fitch's
ratings also recognize the company's high leverage relative to its
regional Bell operating company -- RBOC -- peer group, the
business risks and ongoing cash requirements of Qwest
Communications's out-of-region, long-haul business and the lack of
an owned and controlled national wireless business.

The ongoing Securities and Exchange Commission, Department of
Justice, General Services Administration and shareholder lawsuits
remain an overhang on Qwest Communications 's credit profile.  The
resolution of these matters may have a material effect on the
company's liquidity position.  Fitch notes that proceeds from the
$750 million revolver at Qwest Services Corporation cannot be
utilized to settle liabilities connected to the SEC, DOJ or
shareholder lawsuits.

As of the end of the second quarter of 2004, Qwest Communications
had approximately $17.2 billion of debt outstanding down slightly
from the $17.5 billion outstanding as of year-end 2003. Qwest
Communications's debt-to-EBITDA leverage metric was 4.9 times (x)
on an LTM basis.  Qwest Corporation 's leverage metric at the end
of the second quarter was 1.5x. Fitch expects, on a consolidated
level, Qwest Communications 's credit-protection metrics will
remain relatively consistent with metrics reported for year-end
2003.  This expectation reflects Fitch's view of continued revenue
pressure and modest EBITDA growth.

Fitch believes the company's liquidity position continues to
stabilize.  The Qwest Corporation issuance is a positive event for
the company's liquidity position.  Qwest Communications finished
the second quarter of 2004 with approximately $1.7 billion of cash
on hand and liquid investments.  The company's liquidity position
is also supported by the $750 million available under its revolver
at Qwest Services Corporation as well as the expected $400 million
in proceeds from the wireless transaction which is anticipated to
close during the fourth quarter of 2004 or early 2005 depending on
regulatory approval.  The company's near term maturity schedule is
manageable.  Qwest Corporation is tendering for the largest
portion of the $792 million of debt and capital leases scheduled
to mature during the balance of 2004 on a consolidated basis.

Fitch's Stable Rating Outlook reflects our expectation for
improved levels of free cash flow generation during 2004 and
stabilizing access-line trends, as well as Qwest Communications 's
stable liquidity profile and manageable maturity schedule.


QWEST CORPORATION: S&P Assigns BB Rating to New $500 Million Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Denver, Colorado-based local telephone carrier Qwest Corporation's
$500 million notes due 2011.  These notes represent senior
unsecured debt obligations of the company.  Proceeds are expected
to be used to repay maturing debt, given the company's
announcement that it is tendering for $750 million of Qwest
Corporation debt due in November 2004.

At the same time, Standard & Poor's affirmed its 'BB-' rating of
Qwest Corporation's existing senior unsecured debt, as well as the
'BB-' corporate credit rating on the company and its Denver,
Colorado-based integrated telecommunications carrier parent, Qwest
Communications International Inc.  The outlook is developing.

"The ratings reflect the relatively good overall business risk
profile of Qwest's increasingly challenged but still well-
positioned local exchange business," said Standard & Poor's credit
analyst Catherine Cosentino.  "However, this is tempered by the
company's lack of a national wireless presence in contrast to the
other regional Bell operating companies (RBOCs) and by a fairly
leveraged financial profile--largely a legacy of cash drain from
the classic Qwest long-distance business."

The company's local telephone business comprises about 16 million
access lines in the West and Northwest U.S., spanning 14 states.
Qwest, along with the other RBOCs, has been subject to retail and
wholesale access line losses, with resulting retail access line
losses of 7.9% and overall access line losses of 4.0% on a year-
over-year basis for the second quarter of 2004.  However, Qwest
still has the lion's share of the market and continues to generate
fairly stable levels of operating cash flows from this business.

Moreover, like the other RBOCs, Qwest has begun to aggressively
market long-distance and high-speed digital subscriber line (DSL)
data services to both consumers and businesses in order to improve
overall revenues per customer.  To this end, the company is
expected to improve its DSL availability to approximately 65% of
the company's entire footprint by year-end 2004, from the current
approximate 60% level.

Qwest's out-of-region long-distance business has been subject to
substantial price erosion due to competition in this market,
especially from larger carriers such as AT&T Corporation and MCI.
This business has also been saddled with a high cost base,
primarily because of minimum service commitments to other carriers
for business that has failed to materialize.

While Qwest has been able to renegotiate a fair amount of these
requirements, as of December 31, 2003, these remaining commitments
totaled about $4.4 billion.  Continued network grooming and
reduction of overhead are expected to contribute to an eventual
net break-even position in free cash flow for this business over
the next few years.  This, in turn, should contribute to Qwest's
ability to achieve improved overall EBITDA margins.


QWEST CORP: Moody's Gives New $500M Sr. Unsecured Notes Ba3 Rating
------------------------------------------------------------------
Moody's has assigned a Ba3 rating to Qwest Corporation's proposed
$500 million senior unsecured notes issue maturing in 2011 and has
affirmed Qwest Corporation's Ba3 senior unsecured long-term
ratings.  Qwest Corporation is a regional Bell operating company
(RBOC) whose ultimate parent is Qwest Communications International
Inc.  The proposed issue partially refinances $750 million in 7.2%
Qwest Corporation notes maturing in November 2004, with the
remaining principal to be paid with cash.  Concurrent with this
transaction, Qwest is tendering for the $750 million in Qwest
Corporation notes due in November 2004.  The rating reflects
Moody's expectations for stable free cash flow at Qwest
Corporation, despite continued access line losses.  At the same
time, Moody's has affirmed Qwest Communications' B2 senior implied
rating and the ratings at all other entities in the organization.
The outlook for all ratings remains negative.

Moody's has assigned the following ratings:

Ratings Assigned:

   Qwest Corporation

      * Proposed $500 million senior unsecured    notes -- Ba3;

Ratings Affirmed:

   Qwest Communications

      * Senior Implied rating -- B2;

      * $1.75 billion senior unsecured notes - (guaranteed by
        Qwest Services Corporation, secured by second lien on
        Qwest Corporation stock, and contractually senior to other
        QC 2nd priority liens) -- B3;

      * 7.50% senior unsecured notes due 11/1/2008 (secured by
        second priority lien on QC stock) -- Caa1;

      * 10.875%, 9.47%, and 8.29% senior unsecured notes due
        4/1/2007, 10/15/2007, and 2/1/2008 -- Caa2;

      * Speculative grade liquidity -- SGL-2

      * Qwest Capital Funding -- QCF -- senior unsecured long-term
        ratings -- Caa2

   Qwest Services Corporation

      * Senior secured bank facility -- B2;

      * Senior subordinated notes (secured by junior lien on QC
        stock) -- Caa1;

      * Qwest Corp senior unsecured long-term ratings -- Ba3

      * Northwestern Bell Telephone Company (Qwest Corporation is
        the obligor) senior unsecured long-term ratings -- Ba3;

      * Mountain States Telephone and Telegraph Company (Qwest
        Corporation is the obligor) senior unsecured long-term
        ratings -- Ba3

      * Qwest Communications Corporation -- QCC -- senior
        unsecured long-term ratings -- Caa1;

The negative outlook reflects Moody's concerns that Qwest's
ratings continue to be vulnerable to a negative SEC or Department
of Justice settlement.  While Moody's believes that current rating
levels incorporate a potential settlement that will not severely
impact the company's liquidity nor require the company to incur
additional indebtedness, considerable uncertainty remains while
the investigations are ongoing.  Despite sluggish results in
wireline telecommunications, the ratings' outlook could improve to
stable once the government investigations are resolved.

Qwest Corporation's Ba3 rating reflects its need to support debt
service obligations at the other legal entities within Qwest's
corporate structure as well as fund significant operating losses
at the company's legacy long-haul entity, QCC.  Qwest Corp's Ba3
rating also reflects continued significant free cash flow, but it
is suffering top-line erosion due to the impact of UNE-P and
facilities-based (i.e., cable) competition, as well as wireless
substitution.  Moody's presently rates Qwest Corp's debt two
notches higher than the company's B2 senior implied rating to
reflect structural seniority that Moody's believes gives Qwest
Corporation's senior unsecured creditors superior asset coverage
and access to cash flow.

Moody's is unlikely to move Qwest Corporation's ratings higher
until Qwest's overall credit quality improves, which would be
reflected in the company's senior implied rating.  Qwest's ratings
are likely to improve if the SEC and Department of Justice
investigations as well as shareholder lawsuits have a modest
financial impact and the company is able to significantly limit
the cash drain at its long-haul business.  Qwest's ability to
reverse revenue declines and sustain positive revenue growth will
be a key determinant of future rating direction.  Conversely, QC's
rating could fall if it suffers accelerated access line erosion
and subsequent cash flow deterioration, particularly from cable
VoIP competition.  QC's ratings could also be negatively impacted
by increased debt, increased operating losses or deteriorating
liquidity at other Qwest legal entities.

Qwest's management has focused its effort during the past two
years on debt reduction through asset sales -- as evidenced by the
company's agreement to sell its PCS licenses and wireless assets
to Verizon Wireless for $418 million, debt exchanges, and tender
offers.  As a result, they have reduced the company's debt from
more than $26 billion to slightly more than $17 billion with
approximately $1.7 billion of cash and liquid investments
remaining.  In the process, they have achieved removal of
restrictive covenants.  Moody's ratings expect that Qwest will
further simplify its present capital structure, but that this
process will take several years to accomplish.

Moody's believes that Qwest faces many growing business
challenges.  Qwest's long-haul business continues to consume cash,
and industry overcapacity effectively negates any significant
revenue upside.  Like other telcos, Qwest has focused on cost
reduction and limiting capital investment as a way to stabilize
operating cash flow.  While this focus has been effective at
limiting credit deterioration, Moody's believes long-term credit
improvement requires revenue growth.

Qwest's SGL-2 speculative grade liquidity rating reflects Moody's
view that the company possesses good liquidity and has an ability
to meet its estimated obligations over the next twelve months
through internal resources.  The proposed partial refinancing of
Qwest Corp's 7.2% notes maturing in November 2004 alleviates some
of Moody's concerns regarding looming debt amortizations as
$750 million in short-term maturities will be replaced with debt
maturing in 2011.

The company's cash and liquid investments balance was $1.7 billion
at the end of Q2'04.  Debt maturities total nearly $793 million in
2004 (including the $750 million in Qwest Corp bonds maturing in
November) and $579 million in 2005.  We expect the company to
generate $250 million per year in free cash flow in 2004 and over
$400 million in 2005 due to revenue stabilization, productivity
improvements and the continued roll off of minimum purchase
obligations -- MPOs -- and lease payments at the company's long-
haul subsidiary, QCC.  As MPOs continue to roll off, we believe
that the company could generate upwards of $700 million in free
cash flow in 2006.  Moody's does not expect the ongoing SEC and
DoJ investigation to negatively affect QCII's liquidity in the
near term.

We expect the company to have full access to its undrawn $750
million credit facility at Qwest Services Corp., a subsidiary of
QCII.

Qwest's capex run rate is currently $1.9 billion for 2004 or over
13.5% of expected revenues, which provides the company with some
cushion to reduce discretionary investment should operating
performance unexpectedly falter.

Qwest is a RBOC and nationwide inter-exchange carrier (IXC)
headquartered in Denver, Colorado


RENT-WAY: 401(k) Retirement Savings Plan Hires Malin Bergquist
--------------------------------------------------------------
On June 18, 2004, the Rent-Way, Inc. 401(k) Retirement Savings
Plan engaged the accounting firm of Malin, Bergquist & Company,
LLP as its new independent public accountants.  The Plan dismissed
its former independent public accountants, PricewaterhouseCoopers
LLP, on June 22, 2004.  The decision to change the independent
public accountants for the Plan was approved by the Employee
Benefits Committee of the Plan.

Rent-Way (S&P, B+ Corporate Credit Rating, Stable) is one of the
nation's largest operators of rental-purchase stores.  Rent-Way
rents quality name brand merchandise such as home entertainment
equipment, computers, furniture and appliances from 753 stores in
33 states.

                         *     *     *

As reported in Troubled Company Reporter's January 15, 2004
edition, Rent-Way, Inc., engaged Ernst & Young LLP as its new
independent public accountants effective December 22, 2003.

On December 22, 2003, the Company dismissed PricewaterhouseCoopers
LLP. The decision to change the Company's accounting firm was
approved by the Audit Committee of the Company's Board of
Directors.

Concerning the two fiscal years ended September 30, 2003 and 2002
and the subsequent interim period from October 1, 2003 to December
22, 2003, PricewaterhouseCoopers issued a report dated December
28, 2001 to the Company's Audit Committee summarizing "reportable
conditions" and "material weaknesses" as defined by the AICPA in
the Company's internal controls that were initially observed
during PricewaterhouseCoopers' audit of the Company's financial
statements for the fiscal year ended September 30, 2000.  These
conditions and weaknesses, which were discussed by
PricewaterhouseCoopers with the Company's Audit Committee,
concerned:

   (1) the Company's need to conduct a risk assessment to be used
       in implementing a comprehensive system of effective
       internal control; and

   (2) the Company's inability to reconcile its general ledger
       inventory amounts with the inventory amounts as reported by
       its point-of-sale inventory accounting system.

PricewaterhouseCoopers issued a report dated December 27, 2002 to
the Company's Audit Committee stating:

   (1) that the reportable conditions and material weaknesses
       relating to the Company's need to conduct a risk assessment
       and implement an effective system of internal control had
       been resolved; and

   (2) the reconciliation between the general ledger and point-of-
       sale system continued as a reportable condition.

This reportable condition was discussed by PricewaterhouseCoopers
with the Company's Audit Committee.  This reportable condition was
subsequently resolved by the Company during the fiscal year ended
September 30, 2003. The Company has authorized
PricewaterhouseCoopers to respond fully to the inquiries of Ernst
& Young concerning the subject matter of the reportable events
described.


SIGHT RESOURCE: Transfers Kent Optical Assets to CadleRock
----------------------------------------------------------
On June 24, 2004, substantially all of the assets of Kent Optical
Company, a wholly owned subsidiary of Sight Resource Corporation,
were transferred to CadleRock Joint Venture, L.P.  The transfer
included the assets of Kent Optometric Providers Inc., a
subsidiary of Kent Optical.  In consideration of the transfer, the
secured debt owing to CadleRock by Sight Resource and its debtor-
subsidiaries was reduced by $1,175,000.  CadleRock immediately
resold the assets to third party purchasers for the same amount.

The transfer of the Kent Assets was pursuant to an Eighth Loan
Modification Agreement between the Debtors and CadleRock.

The transfer of the Kent Assets involved 20 retail optical stores
in Michigan.  Contemporaneously with the transfer of the assets to
CadleRock, the retail leases relating to the 20 locations were
assigned by Kent Optical to the third party purchasers, and the
third party purchasers assumed the obligations of Kent Optical
under the leases.

Sight Resource Corporation and its subsidiaries each filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code on June 24, 2004 in the United States Bankruptcy Court for
the Southern District of Ohio, Western Division, at Cincinnati,
Ohio.  Apart from Kent Optical, Sight Resource operates or
operated five retail optical chains. Those are Cambridge Eye
Associates (Massachusetts and New Hampshire), Vision World (Rhode
Island), E. B. Brown Opticians (Ohio and Pennsylvania), Eyeglass
Emporium (Indiana) and Vision Plaza (Louisiana).  Sight Resource
has requested Bankruptcy Court approval of the rejection of leases
of 30 of the 32 E. B. Brown Opticians stores, all 15 Vision Plaza
stores, the two remaining stores operated under the Kent Optical
name, and one Eyeglass Emporium store.  As of June 23, 2004, Sight
Resource discontinued operations in the stores previously operated
in the locations covered by the leases as to which approval to
reject has been requested.

Sight Resource's continuing operations include 19 stores operating
under the name Cambridge Eye Associates, six stores operated under
the name Vision World, six stores operating under the name
Eyeglass Emporium, and one E. B. Brown Opticians store.  No
trustee has been appointed, and Sight Resource and its
subsidiaries continue to manage their business as debtors in
possession.  Sight Resource and its subsidiaries have requested
that the Court jointly administer the proceedings under Case No.
04-14987.

On June 23, 2004, the Debtors entered into a Ninth Loan
Modification Agreement with CadleRock Joint Venture, L.P.,
pursuant to which CadleRock lent the Debtors $275,000.  CadleRock
is the Debtors pre-filing secured creditor, and the $275,000 loan
was made in anticipation of the Chapter 11 filing.  That loan,
like the other amounts owing by the Debtors to CadleRock, is
secured by a security interest the Debtors' substantially all
assets.  The $275,000 loan, together with interest thereon, is
repayable in 10 equal weekly installments of beginning on July 6,
2004.

Apart from the $275,000 loan, the remaining amount of the secured
indebtedness (inclusive of interest and fees) owing to CadleRock
is approximately $434,000.  The scheduled maturity date of the
$434,000 is June 30, 2004.


SK GLOBAL AMERICA: Court Sets Plan Voting Deadlines
---------------------------------------------------
As SK Global America, Inc., proceeds toward confirmation of its
chapter 11 Plan, Judge Blackshear of the U.S. Bankruptcy Court for
the Southern District of New York fixes:

    (a) August 4, 2004 at 5:00 p.m., New York Time, as the Voting
        Record Date;

    (b) August 23, 2004 as the last day for filing motions for
        temporary allowance of a claim for voting purposes;

    (c) September 8, 2004 at 5:00 p.m., as the last day and time
        for filing and serving objections to confirmation of the
        Plan; and

    (d) September 8, 2004 at 5:00 p.m., as the last day and time
        to file ballots accepting or rejecting the Plan with
        Bankruptcy Services LLC.

The Court will consider confirmation of the Liquidation Plan of SK
Global America Inc. and its debtor-affiliates on September 15,
2004 at 10:00 a.m.

Headquartered in Fort Lee, New Jersey, SK Global America,
Inc., is a subsidiary of SK Global Co., Ltd., one of the world's
leading trading companies.  The Debtors file for chapter 11
protection on July 21, 2003 (Bankr. S.D.N.Y. Case No. 03-14625).
Albert Togut, Esq., and Scott E. Ratner, Esq., at Togut, Segal &
Segal, LLP, represent the Debtors in their restructuring efforts.
When they filed for bankruptcy, the Debtors reported
$3,268,611,000 in assets and $3,167,800,000 of liabilities.
(SK Global Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


SMITH SAND: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Smith Sand Company Inc.
        806 East Burnside Drive
        Garden City, Kansas 67846

Bankruptcy Case No.: 04-14418

Chapter 11 Petition Date: August 9, 2004

Court: District of Kansas (Wichita)

Judge: Chief Judge Robert E. Nugent

Debtor's Counsel: Edward J Nazar, Esq.
                  Redmond & Nazar, L.L.P.
                  245 North Waco, Suite 402
                  Wichita, Kansas 67202
                  Tel: (316) 262-8361

Total Assets: $4,541,810

Total Debts: $4,564,284

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Garden City Coop              Trade Debt (Fuel)         $278,567
PO Box 838
Garden City, Kansas 67846

Zurich American               Insurance                 $117,004
Insurance Co

Oils Recovery                 Trade Debt (Fuel)         $100,749

Bryant & Bryant                                          $65,000

Berkley Risk                  Insurance                  $57,854
Administrators Company

Miller Truck Lines Inc.       Freight                    $45,402

Pearce Midwest                Trade Debt                 $44,762

Asphalt Sales &               Trade Debt                 $43,450
Transportation

Foley Equipment               Trade Debt                 $42,947

Arizona Construction                                     $40,000
Equipment

United Rentals                Subcontractor              $34,801
Highway Tech

Citibusiness Card             Trade Credit Card          $24,082

Taylor & Associates of                                   $23,292
Oklahoma

Pine Instrument Company       Trade Debt (Lab            $22,750
                              Equipment)

L&D Trucking, Inc.            Freight                    $22,306

Napa Garden City              Trade Debt                 $17,453
Auto Parts

Valero Energy                 Trade Debt                 $16,673

Eastern Colorado              Trade Debt (Crushed        $14,923
Aggregates                    Rock)

Elkhart Coop                  Trade Debt (Fuel)          $14,578
Rolla Coop

Murphy Tractor Powerplan      Trade Debt (Equipment)     $12,556


SOLUTIA: Subsidiary Plans to Install Deep-Dye Coloring Line in Va.
------------------------------------------------------------------
CPFilms, Inc., a Solutia, Inc., subsidiary and a leading
manufacturer of precision-coated films for industrial, commercial
and solar control applications, will be installing a new high-tech
polyester film dyeing machine at its Martinsville site in
Virginia.

The new machine will enable deep-dye coloring on films from
thicknesses of 0.5 mil to 10 mil and widths up to 72 inches.  It
features state-of-the-art, on-line digital monitoring systems and
the latest in process control and drive systems software.  The
machine is designed to meet the needs of a variety of markets
where stringent color control and excellent optics are required,
such as solar control window films, color filters, and graphic
arts.

The new dye line is being designed and built by CPFilms engineers,
and is the latest step in ensuring that CPFilms will continue to
have the most modern equipment in the world.  The line will be
installed in a building that is adjacent to the 9,000-square-foot
structure being prepared for the new, state-of-the-art metallizer.
Both lines are expected to be fully operational in the first
quarter of 2005.

"This expansion is part of CPFilms' continued commitment to
providing our customers with access to the latest technology in
film coatings," said Ken Vickers, president and general manager of
CPFilms.  "We are confident that this new dye line and the new
metallizer, also recently announced, will enable us to provide our
customers with an even broader array of products that will meet
the demands of their cutting-edge applications as well as provide
for the continued growth of our business."

                        About CPFilms, Inc.

Headquartered in Martinsville, Virginia, CPFilms, Inc. --
http://www.cpfilms.com/-- is the world's largest producer of
solar control window films for automotive and architectural
applications.  CPFilms also supplies a wide range of enhanced
films for applications requiring precision-coated substrates
including electronics, reprographics, graphic arts, display
technology, decorative, medical and various specialties.  CPFilms
currently has three major manufacturing sites strategically
located in Virginia; California; and the UK.  CPFilms is a unit of
Solutia, Inc.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000)


STERLING GROUP: Taps Amisano Hanson as Independent Accountants
--------------------------------------------------------------
Amisano Hanson, Chartered Accountants, has been engaged as
principle independent accountants for Sterling Group Ventures,
Inc., effective June 17, 2004.  Amisano Hanson, Chartered
Accountants replaces Cordovano and Honeck, P.C., as principal
independent accountants as of June 17, 2004, the date the Former
Accountants were dismissed by the Company.  The decision to change
accountants has been approved by the Company's Board of Directors.

The Former Accountant's reports on the consolidated financial
statements of the Company for each of the past two fiscal years
ended May 31, 2003 and 2002 contained a separate paragraph stating
that "the Company's operating losses raise substantial doubt about
the ability to continue as a going concern."  The Former
Accountant further comments in the notes to the financial
statements, that "inherent in the Company's business are various
risks and uncertainties, including its limited operating history,
historical operating losses, dependence upon strategic alliances,
and the historical success rate of mineral exploration."


SURE FIT: Completes 100% Asset Sale to D.E. Shaw Affiliate
----------------------------------------------------------
An affiliate of the D. E. Shaw group completed the acquisition of
substantially all of the assets of Sure Fit, Inc. after being the
winning bidder at a court-approved auction on August 3, 2004.  The
acquired assets include the inventory, receivables, equipment,
intellectual property, and certain leases of Sure Fit, Inc., which
has been in bankruptcy since March 2004.

The new company, to be named Sure Fit Inc., will continue
operating out of New York City and the Allentown area. Previously
announced plans to close a manufacturing facility in Allentown and
implement an associated workforce reduction of approximately 140
employees by October will remain in effect.  The company will
continue to operate call and distribution centers in the Allentown
area, and will maintain marketing, sales, sourcing, product
development, administrative, and financial staff in New York and
Pennsylvania.

With sales of over $150 million in 2003, Sure Fit is the leading
North American producer of furniture slipcovers for home use. The
company sells Sure Fit-branded slipcovers and accessories through
major home retailers and department stores, as well as directly to
consumers through its Slipcover By Mail (SBM) catalog and its Web
site http://www.SureFit.com/

Salo P. Grosfeld, President of Miami-based home textile firm J.R.
United Industries, Inc., has been appointed CEO of the new Sure
Fit Inc. Mr. Grosfeld will also retain his position as the head of
J.R. United, which is not affiliated with either Sure Fit or the
D. E. Shaw group.  Former Sure Fit CEO Bert Shlensky is expected
to stay on at the new company in an advisory role.

"This is a wonderful niche business.  We're excited at the
prospect of returning the Sure Fit business to profitability by
expanding relationships with customers and suppliers," said Max
Holmes, a managing director of D. E. Shaw & Co., L.P. and head of
the firm's distressed securities group.  "Leveraging Salo
Grosfeld's expertise, we also plan to explore opportunities for
product line extensions."

The sale price includes $16.5 million in cash plus the assumption
of approximately $4 million in operating liabilities. In addition,
a wholly owned subsidiary of D. E. Shaw Laminar Portfolios has
agreed to provide a $10 million line of credit to the new Sure Fit
Inc.  The acquisition was approved by Judge Burton R. Lifland of
the U.S. Bankruptcy Court, Southern District of New York, on
August 5, 2004.

The new Sure Fit Inc. will operate as a subsidiary of D. E. Shaw
Laminar Portfolios, L.L.C., whose activities include the
deployment of capital in connection with the restructuring of
companies with valuable assets that may currently be experiencing
financial distress.  D. E. Shaw Laminar Portfolios is a member of
the D. E. Shaw group, a New York-based investment and technology
development firm with approximately $8 billion in aggregate
capital.

Headquartered in New York, New York, Sure Fit, Inc.
-- http://www.surefit.net/-- sells home furniture coverings,
manufactures and markets one-piece slipcovers and furniture throw
covers.  The Company filed for chapter 11 protection on March 7,
2004 (Bankr. S.D.N.Y. Case No. 04-11495). David C. McGrail, Esq.,
at Dechert LLP represents the Debtors in their restructuring
efforts.  When the Company filed for protection from their
creditors, they listed estimated debts and assets of over $50
million each.


THE LOMA COMPANY: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Loma Company, LLC
        2900 Highway 93
        Carencro, Louisiana 70520

Bankruptcy Case No.: 04-51957

Chapter 11 Petition Date: August 11, 2004

Court: Western District of Louisiana (Opelousas)

Debtor's Counsel: H. Kent Aguillard, Esq.
                  Young, Hoychick & Aguillard
                  PO Box 391
                  Eunice, Louisiana 70535
                  Tel: (337) 457-9331
                  Fax: (337) 457-2917

Total Assets: $8,946,703

Total Debts: $19,842,342

Debtor's 5 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Soloco, LLC                                          $11,500,000
207 Town Center Parkway
Lafayette, Louisiana 70503

Bank One                      Value of Security:      $7,048,000
PO Box 655415                 $2,175,772
Dallas, Texas 75265-5415

Soloco, LLC                                             $530,399
207 Town Center Parkway
Lafayette, Louisiana 70503

OLS Consulting Services Inc   Start-up Cost             $527,876

Soloco, LLC                   Loan for new molds        $233,364
207 Town Center Parkway
Lafayette, Louisiana 70503


TITANIUM METALS: Sets Aug. 19 Record Date for 5-for-1 Stock Split
-----------------------------------------------------------------
Titanium Metals Corporation's (NYSE: TIE) stockholders and its
Board of Directors have approved a five-for-one stock split of the
Company's common stock, $0.01 par value.  As TIMET announced, the
Record Date for the stock split, which will be effected in the
form of a dividend, has been set as the close of business on
Thursday, August 19, 2004.  Each stockholder of record will be
distributed a certificate or account statement for those with
accounts with the Company's transfer agent (American Stock
Transfer and Trust Company) representing the new shares on
Thursday, August 26, 2004, and the common stock will trade (ex)-
distribution on Friday, August 27, 2004.  Each currently
outstanding stock certificate will continue to represent the same
number of shares shown on its face following the stock split.

Headquartered in Denver, Colorado, Titanium Metals Corporation is
an integrated producer of titanium sponge and mill products used
primarily for applications in the highly cyclical and competitive
aerospace industry.  The titanium metals industry is extremely
competitive worldwide, in part because excess industry capacity
intensifies price competition during cyclical downturns.

                         *     *     *

As reported in the Troubled Company Reporter's May 21, 2004,
edition, Standard & Poor's Rating Services said it raised its
corporate credit rating on Titanium Metals Corp. to 'B' from 'B-'.
The outlook is stable.

At the same time, Standard & Poor's raised its preferred stock
rating to 'CCC' from 'D' and assigned this rating to the company's
proposed 6.75% Series A convertible preferred stock offering,
which is being issued to tender the company's outstanding 6.625%
convertible preferred securities, Beneficial unsecured convertible
securities.  Completion of the tender offer is expected to occur
in the third quarter of 2004.

"The corporate credit rating upgrade reflects Standard & Poor's
assessment that aerospace demand for titanium has reached its
nadir and should begin to improve in 2005," said Standard & Poor's
credit analyst Dominick D'Ascoli.  The preferred stock rating
upgrade follows the company's payment of $22 million in accrued
interest and its intention to resume quarterly interest payments
beginning June 1, 2004.


VALCOM INC: Sells 6 of 20 Sound Stages to Pay $8.5 Million Debt
---------------------------------------------------------------
ValCom, Inc. was forced to sell off six of the 20 sound stages in
order to pay off $8.5 million of its debt.  The Company will
continue to own and operate its remaining 14 sound stages in Los
Angeles and Las Vegas, with 300,000 square feet of commercial
space.

ValCom, Inc. is a diversified entertainment company.

In Valcom's 2003 Fiscal Year Report, total shareholders' equity
decreased to $2,701,561 in fiscal year 2003.  Additional paid in
capital increased to $13,242,200 in fiscal year ended September
30, 2003.

The Company financed its operations with cash from its operating
activities and through sales of equipment and private offerings of
its securities to a director of the Company.


VANGUARD HEALTH: S&P Junks $560M Notes and Rates $1.05B Credit B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating and its
recovery rating of '3' to the proposed $1.05 billion senior
secured bank credit facility of Vanguard Health Holding Co. II LLC
and Vanguard Holding Co. II Inc.  -- the co-borrowers.  The
facility is due in 2011.  Vanguard Holding Co. II Inc. is a newly
formed wholly owned subsidiary of Vanguard Health Holding Co. II
LLC.  The latter, in turn, is a newly formed wholly owned
subsidiary of a new holding company that will be 100% owned by
Vanguard Health Systems Inc.

The new facility is rated the same as Vanguard Health Systems
Inc.'s corporate credit rating; this and the '3' recovery rating
mean that lenders are unlikely to realize full recovery of
principal in the event of a bankruptcy, though meaningful recovery
is likely (50%-80%).

At the same time, Standard & Poor's assigned its 'CCC+' rating to
$560 million in senior subordinated notes due 2014 that are
obligations of the same co-borrowers as the bank credit
facilities.  A 'CCC+' rating has been assigned to $140 million in
senior discount notes due 2015, issued by Vanguard Health Holding
Co. I LLC and Vanguard Holding Co. I Inc. -- the co-borrowers.

Standard & Poor's also lowered its corporate credit rating on
hospital operator Vanguard Health Systems Inc. to 'B' from 'B+'
and removed it from CreditWatch where it was placed on July 26,
2004.  The CreditWatch listing followed the announcement that The
Blackstone Group, a private equity firm, would acquire Vanguard
Health Systems in a transaction estimated to be about $1.75
billion.  As of June 30, 2004, Vanguard's total debt outstanding
was $623 million. However, pro forma for the transaction, the debt
will increase to approximately $1.2 billion.  The outlook is
stable.

Upon completion of the Blackstone buyout, the ratings on Vanguard
Health Systems' existing senior secured credit facility and
subordinated notes will be withdrawn.

"The downgrade reflects the significant increase in Vanguard's
debt leverage pro forma for the Blackstone transaction and
Standard & Poor's concern that the company's aggressive business
policies will prevent it from soon earning a return consistent
with a higher level of credit quality," said Standard & Poor's
credit analyst David Peknay.

The low-speculative-grade ratings on Nashville, Tennessee-based
Vanguard Health Systems Inc. reflect a highly leveraged financial
profile and a portfolio of hospitals that is only modestly
diversified.  The company has grown during the past few years
primarily through a risky strategy of buying turnaround
situations.  The competitive nature of Vanguard's markets and
chronic reimbursement risk are other critical factors influencing
the rating.  With Vanguard's completion in early 2003 of the
Baptist Health System acquisition for $306 million, it now owns
and operates 16 acute-care hospitals in Illinois, Arizona,
California, and Texas.  Nearly all of these hospitals were
acquired from not-for-profit entities.

Vanguard attempts to bolster the profitability of its newer
operations by increasing certain key services such as cardiology,
orthopedics, and neurology; recruiting additional physicians;
eliminating less profitable services; and rationalizing capital
costs.


VANGUARD HEALTH: Moody's Junks Notes & Rates Credit Facilities B2
-----------------------------------------------------------------
Moody's Investors Service assigned a rating of B2 to Vanguard
Health Holding Company II, LLC -- VHC II LLC -- and Vanguard
Holding Company II, Inc. -- VHC II Inc -- as co-issuers of $1,050
million of senior secured credit facilities comprised of a $250
million revolving credit facility, a $475 million term loan, and
two delayed draw term loans of $175 million and $150 million.
Moody's also assigned a Caa1 rating to VHC II LLC and VHC II Inc
as co-issuers of $560 million of senior subordinated notes and a
Caa2 rating to Vanguard Health Holding Company I, LLC -- VHC I LLC
-- and Vanguard Holding Company I, Inc. -- VHC I Inc -- as co-
issuers of $140 million of senior discount notes.  In addition,
Moody's assigned a B2 senior implied rating to VHC II LLC and a
Caa2 senior unsecured issuer rating to VHC I LLC.  The rating
action follows the announcement by the company that the senior
secured credit facilities, senior subordinated notes and senior
discount notes will be combined with a cash common equity
contribution by The Blackstone Group to fund the purchase of a
majority equity stake of Vanguard Health Systems, Inc. in
connection with the merger of Vanguard with an affiliate of
Blackstone.  As a result of the merger, Vanguard's existing
majority shareholder, Morgan Stanley Capital Partners will
reinvest $130 million in Vanguard from the proceeds it receives in
the merger.  In addition, the sources of funds for the transaction
will be used to refinance all of the company's existing
indebtedness (other than existing capital leases of approximately
$6 million), including the company's $300 million 9.75% senior
subordinated notes due 2011 and to redeem all of the company's
outstanding 8.0% PIK Preferred Shares.

Blackstone and Vanguard's existing management will contribute
equity to VHS Holdings LLC -- VHS Holdings, the new parent holding
company of the assets previously owned by Vanguard Health Systems,
Inc. Through an intermediate holding company VHS Holdings will own
100% of VHC I LLC, which in turn will own 100% of VHC I Inc.  VHC
I LLC will own 100% of VHC II LLC, which in turn will own 100% of
VHC II Inc.  The co-issuer structure is necessary to complete the
issuance of debt for investors limited in their ability to
purchase debt securities from issuers, which are LLC's.

Upon the completion of the recapitalization transaction, Moody's
will withdraw the existing ratings of Vanguard Health Systems,
Inc.

Ratings assigned:

   * $250 million senior secured revolving credit facility due
     2010, rated B2;

   * $475 million senior secured term loan due 2011, rated B2;

   * $175 million senior secured delayed draw term loan due 2011,
     rated B2;

   * $150 million senior secured delayed draw term loan due 2011,
     rated B2;

   * B2 senior implied rating;

   * $560 million senior subordinated notes due 2014, rated Caa1;

   * $140 million senior discount notes due 2015, rated Caa2; and

   * Caa2 senior unsecured issuer rating.

The outlook for the ratings is negative.

The ratings reflect:

   -- weakness in credit metrics as a result of the significant
      amount of debt incurred in the transaction;

   -- stress on cash flow as a result of higher cash interest
      expense associated with a higher debt load;

   -- limited free cash flow as a result of significant capital
      expenditures including maintenance, growth and new
      development activities; the increase in total debt
      outstanding through fiscal year 2006 related to new
      development projects;

   -- the reliance on two main markets, Phoenix, Arizona and San
      Antonio, Texas to generate significant revenues and cash
      flows for the business;

   -- the aggressive business policies of management as reflected
      in the highly leveraged recapitalization transaction coupled
      with the company's development projects;

   -- the weight of increased expenses for bad debt reserves and
      charity care affecting the hospital industry; and

   -- the general level of rising expenses related to labor and
      insurance costs.

The ratings also reflect:

   -- Vanguard's improved operating performance, especially in the
      newly acquired San Antonio marketplace, and stabilization
      and improvement in the Phoenix market;

   -- critical mass in the company's markets that allow Vanguard
      to favorably negotiate with managed care in addition to
      attracting quality clinical staff;

   -- the company's conservative policies related to price
      increases for hospital services;

   -- Vanguard's improvement in supply costs as a result of a high
      level of compliance with its GPO purchasing partner;

   -- the expectation of improving cash flow resulting from the
      Medicare reimbursement legislation including the full market
      basket increases for fiscal year 2005;

   -- a quality management team with significant industry
      experience; and

   -- the significant equity contribution by management and
      Blackstone in the transaction.

The negative outlook reflects Moody's belief that the company's
significant capital expenditures made through fiscal year 2007 for
both maintenance and development activities will reduce cash flow
available for debt repayment.  Moody's also expects Vanguard to
incur additional debt for both new hospital development and
acquisitions.  If Vanguard is less aggressive in its acquisition
or development program and utilizes free cash flow to reduce debt,
the ratings would likely improve.

The negative outlook also reflects Vanguard's lower margins as
compared to industry competitors.  Moody's projects operating
margins for the company to improve over the intermediate term as
Vanguard continues to develop its markets.  Moody's assumption is
based on the company effectively negotiating with managed care
payors and to benefit from a continued favorable government
reimbursement environment.  If Vanguard is unsuccessful in
maintaining margins resulting in a strain on cash flow, and the
company continues the rapid expansion projected by Moody's, the
ratings would likely come under pressure.  However, if Vanguard
shows improved margins resulting in greater cash flow, the outlook
would likely improve.  If the improvement in cash flow results in
a reduction in debt outstanding, the ratings would likely be
upgraded.

After giving effect to the proposed transactions pro-forma cash
flow coverage of debt would be approximately 8% for the fiscal
year ended June 30, 2004.  Pro-forma free cash flow coverage of
debt would be approximately 1% for the fiscal year ended June 30,
2004.  After giving effect to development capital expenditures,
pro-forma free cash flow coverage of debt would be negative.
These coverage levels are moderate for the B2 rating category.
For the ratings to be upgraded by one notch, Moody's would expect
to see sustained cash flow coverage of debt between 10% and 15%
while sustained free cash flow coverage of debt would be
approximately 5% to 10%.

Pro-forma EBIT coverage of interest would also be moderate for the
B2 category.  Pro-forma EBIT coverage of interest would 1.6 times
for the fiscal year ended June 30, 2004.  Pro-forma EBIT coverage
of cash interest would be 2.0 times for the fiscal year ended
June 30, 2004.

Pro-forma debt to EBITDA would be 6.7 times for the fiscal year
ended June 30, 2004 and pro-forma adjusted debt to EBITDAR would
be 6.9 times.  These ratios would be weak in the B2 category. Pro-
forma EBITDA coverage of interest would 2.5 times for the fiscal
year ended June 30, 2004.  Moody's notes that the use of EBITDA
and related EBITDA ratios as a single measure of cash flow without
consideration of other factors can be misleading.

Pro-forma for the completion of the recapitalization, Vanguard
should have adequate liquidity to meet its debt and working
capital obligations.  The company will have access to a $250
million revolving credit facility in addition to cash flow
generated from operations.  Vanguard will also have available two
delayed draw term loans for future development activities.  The
first delayed term loan of $150 million will be used for specific
acquisition opportunities, and will be available to the company
for five months post closing of the transaction.  The second
delayed draw term loan of $175 million will be available for a
period of one year, and will be used for general corporate
purposes including specific development projects and working
capital.  Upon the draw of each of the delayed draw term loans,
the outstanding loan amounts will convert into the company's
existing term loan structure and be governed by the same credit
agreement terms as the $475 million term loan.

The senior secured credit facilities are rated at the senior
implied level.  Vanguard has significant collateral on its balance
sheet in the form of working capital and fixed assets.  However,
in Moody's view the combination of all senior secured debt,
including the delayed draw term loans, results in a collateral
coverage that does not result in a notch upward for the credit
facilities.

The senior subordinated notes are notched two levels below the
senior implied level to reflect the unsecured nature of the
obligations in addition to the notes subordination.

The senior discount notes and senior unsecured issuer rating of
VHC I LLC are notched one level below the senior subordinated
notes of VHC II LLC to reflect their structural subordination to
the senior subordinated notes.

Vanguard Health Systems owns and operates 16 acute care hospitals
and complementary facilities and services in:

   * Chicago, Illinois;
   * Phoenix, Arizona;
   * Orange County, California; and
   * San Antonio, Texas.

The Company's strategy is to develop locally branded,
comprehensive health care delivery networks in urban markets.
Vanguard will pursue acquisitions where there are opportunities to
partner with leading delivery systems in new urban markets.  Upon
acquiring a facility or network of facilities, Vanguard implements
strategic and operational improvement initiatives including
improving quality of care, expanding services, strengthening
relationships with physicians and managed care organizations,
recruiting new physicians and upgrading information systems and
other capital equipment.  These strategies improve quality and
network coverage in a cost effective and accessible manner for the
communities we serve.  For the fiscal year ended June 30, 2004
Vanguard reported total revenues of approximately $1.8 billion.


VOEGELE MECHANICAL: Engages Phoenix Management as Consultants
-------------------------------------------------------------
Voegele Mechanical, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania for permission to employ Phoenix
Management Services, Inc., as its reorganization consultant.

Phoenix Management will:

    a) assist the Debtor in executing a plan to complete certain
       contracts and liquidate the assets of the Debtor, if
       necessary, in an orderly fashion that maximizes value for
       all constituents;

    b) assist the Debtor in preparing a plan of reorganization;

    c) assist the Debtor in evaluating a plan that contemplates
       the sale of substantially all of the assets of the Debtor
       to a potential buyer;

In the event of a substantial sale of all of the Debtor's assets
under Sections 363 and 365 of the Bankruptcy Code, Phoenix
Management will:

    a) assist the Debtor in identifying other potential
       interested parties;

    b) coordinate the due diligence process;

    c) assist in negotiating the terms of any proposed sale or
       restructuring agreement;

    d) assist the Debtor's management team and Board of
       Directors in the further evaluation of the Debtor's
       business and prospects, while also analyzing the various
       business alternatives that may be available to the
       Debtor which will include the preparation of
       financial projections, cash flow forecasts, liquidity
       projections, and identification of ongoing cash
       requirements;

    e) assist with the preparation of analyses that estimates
       the profitability and cash flow associated with major
       contracts;

    f) assist the Debtor's management in their communications
       with the Company's lenders, including preparation of
       information and presentations to, and meetings with
       Mercantile Capital, L.P.

    g) assist with the preparation and revisions as necessary to
       a weekly Debtor in Possession budget, including the
       development of a thirteen week cash flow, collateral
       roll forward, and availability forecasts;

    h) assist with the preparation of the periodic Borrowing
       Base certificates that the lender may require;

    i) develop and maintain a "Scorecard" to monitor and report
       to the various constituents the Debtor's actual
       performance versus budget;

    j) participate in negotiations with the Debtor's creditors
       and other parties of interest, as required;

    k) work with restructuring counsel to prepare all necessary
       first day motions, prepare Schedules and Statements of
       Financial Affairs to accompany the first day filings,
       work with Claims agent regarding pre-filing obligations,
       and assist management in the preparation of the post
       filing Monthly Operating Reports;

    1) assist with the preparation and presentation of the
       various financial reporting requirements that are typical
       in any bankruptcy proceeding. In this capacity, Phoenix
       Management will assist in the development of the analyses
       required by the lender, U.S. Bankruptcy Court, the Office
       of the U.S. Trustee, and any reasonable requests made by
       the Company's creditors; also, to assist the Debtor with
       developing the appropriate level of reporting that will
       be necessary to satisfy the requirements of the Office of
       U.S. Trustee;

    m) assist the Debtor with developing its Plan of
       Reorganization and in the preparation of disclosure
       Statements accompanying the Plan and in this capacity,
       Will coordinate with the Company in developing business
       plans, financial forecasts, and financing requirements in
       order to assist in the Plan approval process. As
       necessary, Phoenix Management will also assist the Debtor
       with meeting with its creditors so that the Plan can be
       openly discussed and developed in a manner that
       can suit the needs of all of Voegele's constituents;

    n) provide testimony in any Chapter 11 case concerning any
       of the subjects encompassed by the other financial
       advisory services, if appropriate and as required;

    o) assist the Debtor with any other financial or operational
       needs as they may arise at any point during the Debtor's
       Chapter 11 proceedings;

    p) provide such other advisory services as are customarily
       provided in connection with the analysis and negotiation
       of any Plan or sale within bankruptcy; and

    q) provide recommendations to management and the Board of
       Directors regarding a variety of financial, operational
       and management issues.

Michael E. Jacoby will lead the team in this engagement.  Mr.
Jacoby reports that Phoenix Management professionals currently
bill:

      Position                          Hourly Billing Rates
      --------                          --------------------
      Executive Vice Presidents
      & Managing Directors                   $355 - $425

      Senior Vice Presidents                  295 -  345

      Vice Presidents                         195 -  285

      Analysts and Associates                 145 -  185

Headquartered in Philadelphia, Pennsylvania, Voegele Mechanical --
http://www.voegele.net/-- is a heating, air conditioning,
refrigeration, plumbing and electricity contractor.  The Company
filed for a chapter 11 protection on August 3, 2004 (Bankr. E.D.
Pa. Case No. 04-30628).  Rhonda Payne Thomas, Esq., at Klett
Rooney Lieber and Schorling, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection it
estimated its assets and debts at more than $10 million.


UNITED AIR: Machinists' Union Sues Officers Over Pension Funding
----------------------------------------------------------------
The International Association of Machinists and Aerospace Workers
filed a complaint in United States District Court for the Northern
District of Illinois charging United Airlines officers with a
breach of fiduciary duty in electing not to fund employee pension
plans.

The airline announced on July 23 that it would no longer fund
pension plans due to terms it negotiated for new Debtor in
Possession -- DIP -- financing.  The IAM's complaint follows a
warning from the Pension Benefit Guaranty Corporation to United
that, "any such covenants would be inconsistent with ERISA and the
Internal Revenue Code and contrary to public policy."

Named as defendants in the suit are UAL Chief Executive Officer
Glenn Tilton, Chief Financial Officer Frederic F. Brace, Chief
Operating Officer Peter McDonald and the Pensions and Welfare
Plans Committee of United Airlines, Inc.

"As fiduciaries of the pension plans, the defendants had a
responsibility to compel United to meet its funding obligations,"
said Robert Roach, Jr., IAM General Vice President of
Transportation.  "Clearly, they failed.  The IAM has a
responsibility to utilize all possible measures to protect the
interests of our members.  We will not fail."

The IAM is seeking judgment against Tilton, Brace and McDonald for
the amount owed the pension plans by United Airlines and a court
order requiring the three UAL officers to administer the pension
plans, including the funding obligation, in accordance with the
plans' governing documents, IRS regulations and the Employee
Retirement Income Security Act -- ERISA.

Additionally, the IAM seeks to require the defendants to take all
necessary steps to secure funding from any available source to
meet the plans' funding requirements.

"United Airlines must get the message that they cannot abandon
employee benefits at will," said IAM District 141 President Randy
Canale.  "They will not be allowed to continue their slash and
burn approach to restructuring without realizing serious
consequences."

IAM District 141 represents 37,000 active and retired participants
in United Airlines' Ground Employees' Retirement Plan and the
United Airlines Management, Administrative and Public Contact
Pension Plans from the Ramp & Stores, Public Contact, Food
Service, Security, Fleet Technical Instructor, Emergency Procedure
Instructor and Maintenance Instructor classifications.

                          *     *     *

The United Airlines Management, Administrative and Public Contact
Pension Plan, and the United Airlines Ground Employees'
Retirement Plan, both employee pension benefit plans within the
meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974, require United Airlines to make
contributions to fund the defined benefit plans of its employees
in accordance with the Internal Revenue Code and the ERISA.
Under ERISA Section 404(a)(1)(D), the fiduciaries with respect to
the Plans are required to discharge their duties to the Plans in
accordance with the documents and instruments governing the
Plans.

John R. Harney, Esq., at O'Donoghue & O'Donoghue, LLP, in
Washington, D.C., contends that the Pension Committee and Messrs.
Tilton, Brace, and McDonald have breached their fiduciary duty in
violation of ERISA Section 409 to operate the Public Contact and
Ground Plans by:

   -- failing to compel United to meet its obligation to make the
      pension contributions;

   -- continuing to participate in the negotiations with various
      financial institutions without regard to their duty of
      loyalty to the participants and beneficiaries of the Plans;

   -- failing to act in the sole and exclusive interest of the
      Plans; and

   -- not taking any steps to remedy the breach.

The Pension Committee and the Senior Executives had knowledge that
the decision not to fund the defined benefit plans of United
violated the terms of the Plans.

As a result of their fiduciary breach, the participants and
beneficiaries of the Public Contact and Ground Plans have suffered
damages from the underfunding.

The International Association of Machinists and Aerospace Workers
asks the Illinois District Court to:

      (i) compel the Pension Committee and the Senior Executives
          to administer the Public Contact and Ground Plans in
          accordance with the Plans' governing documents, the
          ERISA and the Internal Revenue Code; and

     (ii) require the Pension Committee and the Senior Executives
          to take all necessary steps to secure funding from any
          available source for the Public Contact and Ground
          Plans for those Plans to meet their funding obligations
          under the Internal Revenue Code and ERISA.

The IAM also seeks judgment against the Pension Committee and the
Senior Executives for the amount determined as contributions owed
by United, plus liquidated damages, interest from the date of any
non-payment until the date of payment, costs, and reasonable
attorney's fees.

Four IAM members are also named as Plaintiffs:

   (1) John D. Patrick, Jr., a participant in the Ground Plan;

   (2) Rudy Asuncion, a participant in the Ground Plan;

   (3) Nancy Campbell, a participant in the Public Contact Plan;
       and

   (4) Mary Barry, a participant in the Public Contact Plan.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and  $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


W.R. GRACE: Revises Alternative Dispute Resolution Program
----------------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates delivered papers to
the U.S. Bankruptcy Court for the District of Delaware clarifying
and revising their proposed alternative dispute resolution
program.

The Debtors ask Judge Fitzgerald to approve the revised ADR
Program, explaining that it addresses concerns expressed by the
Court and certain constituencies.

David W. Carickhoff, Jr., Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, P.C., in Wilmington, Delaware, notes
that the ADR Program is, and has always been, intended to offer
the Debtors and the Court an organized system for resolving the
substantive merits of any disputed proof of claim, not merely the
approximately 200 proofs of claim that relate to prepetition
litigation.  According to Mr. Carickhoff, the Debtors presently
have 7,126 unreconciled, non-asbestos claims pending against them
that, if not resolved through simple claims objections, could be
submitted to the ADR Program.

The modified ADR Program:

    (i) requires the Debtors, as an initial step, to file a formal
        claim objection to any disputed proof of claim and provide
        the claimant with an opportunity to respond to that
        objection, consistent with Rule 3007 of the Federal Rules
        of Bankruptcy Procedure, before the Debtors may submit the
        claim to the ADR Program;

   (ii) no longer contains as many opportunities for "foot-faults"
        that would automatically result in the disallowance of
        claims;

  (iii) requires negative notice for certain settlements; and

   (iv) contains a lower maximum for pre-approved settlements.

A copy of the Revised ADR Program is available at no charge at:

      http://bankrupt.com/misc/Revised_ADR_Procedures.pdf


Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Debtors filed for chapter 11
protection on April 2, 2001 (Bankr. Del. Case No: 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl et al. represent the
Debtors in their restructuring efforts.  (W.R. Grace Bankruptcy
News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


WORLDGATE COMMUNICATIONS: Complete $7.55 Million Private Placement
------------------------------------------------------------------
On June 25, 2004, WorldGate Communications, Inc., announced the
completion of a private placement of $7.55 million of its Series A
Convertible Preferred Stock and Warrants with several
institutional investors.  The financing was led by Satellite
Strategic Finance Associates, LLC, a private investment fund.

The proceeds of the financing are expected to allow the Company to
complete development and field trials of the Company's Ojo video
phone product, and to provide working capital as the Company
launches its Ojo video phones later this year.

The preferred stock to be issued pursuant to this placement is
convertible into the Company's common stock at a conversion price
of $2.35 per share.  The Company has the right to require
conversion of the preferred stock into common stock upon achieving
certain price targets with respect to its common stock and the
satisfaction of certain other conditions.  As part of the
transaction, the Company issued five-year warrants to purchase a
total of 1.6 million shares of the Company's common stock, with
one-half of the warrants having an exercise price of $2.69 per
share and the remaining half having an exercise price of $3.14 per
share.  The preferred stock has a dividend rate of 5% per annum,
payable quarterly, which may be paid either by cash or through the
issuance of common stock at the Company's option (with stock
payments being made at a 10% discount to the then current market
price).  The preferred stock has a staged maturity over three
years with scheduled payments of one third due after 18 months,
one half of the remaining due after 24 months and the balance due
after 36 months.  The preferred stock may be redeemed at maturity
in cash or through the issuance of common stock, at the Company's
option (with stock payments being made at the then current market
price).  All dividend and maturity payments made in stock are
subject to the satisfaction of certain conditions including the
listing and availability of an effective registration statement.
The investors also received an additional investment right, for a
limited period of time, to purchase 1.6 million additional shares
of common stock shares at $3.14 a share.

The Company paid fees to Janney Montgomery Scott LLC, Ashenden
Finance & Cie SA and Sloan Securities LLC, based upon the proceeds
received by the Company from certain of the Investors
participating in this financing.  The aggregate fees payable to
these entities was less than six percent of the gross proceeds.

The securities sold in this private placement have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States in the absence of an
effective registration statement or exemption from applicable
registration requirements.  The Company has agreed to file a
registration statement on Form SB-2 within 30 days after the
closing of the transaction for purposes of registering the shares
of common stock for resale upon conversion of the preferred stock
and exercise of the warrants.

                         *     *     *

As reported in the Troubled Company Reporter's April 6, 2004,
edition, Worldgate's independent certified public accountant,
Grant Thornton LLP, issued such a going-concern qualification on
the financial statements of the Company for the fiscal year ending
December 2003, based on the significant operating losses and
accumulated deficiency reported for the fiscal year ended
December 31, 2003.  PricewaterhouseCoopers LLP, the Company's
previous auditors, had also issued a going-concern qualification
for the 2002 fiscal year.


XEROX CORP: Board Declares $1.5625 Preferred Stock Dividends
------------------------------------------------------------
Xerox Corporation's (NYSE: XRX) board of directors last week
declared a dividend of $1.5625 per share on the 6.25 percent
Series C mandatory convertible preferred stock issued in June
2003.  The dividends are payable October 1 to shareholders of
record on September 10.

                    About Xerox Corporation

Xerox is best known for its copiers, but it also makes printers,
scanners, fax machines, software, and supplies, and provides
consulting and outsourcing services.  The company designs its
products for home users, businesses, and high-volume publishers
such as newspapers. Customers include Kinkos and the US Army
Reserve.  Although it plans to expand its color printing
offerings, the company still generates two-thirds of its revenue
from black and white products.  Sales outside the US account for
nearly 45% of revenues. Xerox, which has seen its sales and market
share slip, has cut jobs and sold assets, including half of its
stake in Fuji Xerox.

                         *      *     *

As reported in the Troubled Company Reporter's August 9, 2004
edition, Standard & Poor's Ratings Services affirmed its 'BB-'
corporate credit rating on Stamford, Conn.-based Xerox Corp., and
assigned a 'B+' to the company's proposed $400 million senior
unsecured notes due 2011.  Proceeds from the proposed note issue
are expected to be used primarily to meet near-term debt
maturities.

As of June 30, 2004, Xerox had total outstanding debt of about
$10.3 billion.

"The ratings on Xerox Corp. and related entities reflect mature
and highly competitive industry conditions, continued revenue
weakness, and a leveraged financial profile.  These factors
partially are offset by the company's good position in its core
document processing business, and improving financial
flexibility," said Standard & Poor's credit analyst Martha Toll-
Reed.


XO COMMUNICATIONS: Amalgamated Gadget Discloses 9.4% Equity Stake
-----------------------------------------------------------------
Amalgamated Gadget, L.P., beneficially owns 17,095,381 shares of
the common stock of XO Communications, Inc., representing 9.4% of
the total outstanding common stock of XO.  Pursuant to Rule
13d-3(d)(1)(i), the number of shares deemed to be outstanding is
188,826,717. Amalgamated Gadget holds sole voting and dispositive
power over the stock.  The aggregate amount held equals 17,738,990
shares including:

   -- 257,443 shares of common stock that may be acquired upon the
      exercise of Series A Warrants;

   -- 193,083 shares of common stock that may be acquired upon the
      exercise of Series B Warrants;

   -- 193,083 shares of common stock that may be acquired upon the
      exercise of Series C Warrants.

The shares were acquired by Amalgamated Gadget, L.P., for and on
behalf of R2 Investments, LDC pursuant to an Investment Management
Agreement.  Pursuant to the Agreement, Amalgamated Gadget, L.P.,
has sole voting and dispositive power over such shares and R2 has
no beneficial ownership of such shares.

Because of its position as the sole general partner of
Amalgamated, Scepter may, pursuant to Rule 13d-3 of the Act, be
deemed to be the beneficial owner of 17,738,990 shares of the
Stock, which constitutes approximately 9.4% of the 188,826,717
shares of the Stock deemed outstanding pursuant to Rule
13-3(d)(1)(i).

Because of his position as the President and sole shareholder of
Scepter, which is the sole general partner of Amalgamated,
Geoffrey P. Raynor may, pursuant to Rule 13d-3 of the Act, be
deemed to be the beneficial owner of 17,738,990 shares of the
Stock, which constitutes approximately 9.4% of the 188,826,717
shares of the Stock deemed outstanding pursuant to Rule 13-
3(d)(1)(i).

Acting through its general partner, Amalgamated has the sole power
to vote or to direct the vote and to dispose or to direct the
disposition of an aggregate of 17,095,381 shares of the Stock.

As the sole general partner of Amalgamated, Scepter has the sole
power to vote or to direct the vote and to dispose or to direct
the disposition of 17,095,381 shares of the Stock.

As the President and sole shareholder of Scepter, which is the
sole general partner of Amalgamated, Mr. Raynor has the sole power
to vote or to direct the vote and to dispose or to direct the
disposition of 17,095,381 shares of the Stock.

Carl Icahn holds a 60.7% stake in the Company according to
documents filed with the Securities and Exchange Commission.

Headquartered in Reston, Virginia, XO Communications --
http://www.xo.com/-- provides local, long distance, and data
services to small and midsize business customers as well as to
national enterprise accounts.  Through its acquisition of
Concentric Network Corp. in June 2000, the company has been able
to serve more upscale large accounts with enhanced data services
such as Web hosting, virtual private networks, and high-capacity
data network services, including dedicated wavelength and Ethernet
services.  The Company filed for chapter 11 protection on June 17,
2002 (Bankr. S.D.N.Y. Case No. 02-12947).  XO's stand-alone plan
of reorganization was confirmed on Nov. 15. 2002, and the company
emerged from bankruptcy in January 2003.  Matthew Allen Feldman,
Esq., and Tonny K. Ho, Esq., at Willkie Farr & Gallagher represent
the Debtors in their restructuring efforts.


* BOOK REVIEW: Entrepreneurship: Back to Basics
-----------------------------------------------
Authors:    Gordon B. Baty and Michael S. Blake
Publisher:  Beard Books
Paperback:  308 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981408/internetbankrupt

Entrepreneurs have to wear many hats -- CEO, CFO, marketing
manager, copywriter, bookkeeper, secretary, and at times
delivery boy or girl. Baty and Blake cover all of these. In
one section, they divide the many different positions and
tasks the entrepreneur has to fulfill, especially in the
early stages of a business, into the general categories of
entrepreneurs and custodians. "Entrepreneurial tasks involve
the setting up, planning, and motivational activities of the
firm." This uniquely entrepreneurial activity includes such
business matters as initiating market research, setting
budgets, and finding the right banker. Custodial tasks, on
the other hand, include tracking budget expenditures, buying
materials and supplies, supervising production or services,
and the like.

"As a rule, entrepreneurial tasks are much less delegable
than are custodial tasks." The authors make this fundamental
distinction so that the entrepreneur will understand the
different work necessary during the start-up or early phases
of a business, and not become so absorbed by custodial tasks
that the business suffers from losing the spark most
important to it. This distinction is important for the
entrepreneur to keep in mind in order to understand what
kinds of work to delegate if the business is to remain on a
sound footing and to grow properly. If the reader derives
nothing else from reading this book than this important
fundamental distinction between entrepreneurial and custodial
tasks, Baty and Blake's book will have proved valuable. The
distinction is useful in organizing the entrepreneur's frame
of mind, planning, leadership, and management.

But the authors offer much more than this. Both authors are
steeped in entrepreneurial enterprises. Baty has been
involved in founding, running, and financing entrepreneurial
businesses, including three high-tech firms, and has taught
entrepreneurship at MIT and Northeastern University. Blake
has worked with budding entrepreneurs in Russia, and has
other international experience in the field. Their treatment
of every conceivable topic of interest to the entrepreneur is
imbued with the right amount of overview, concrete
information, tips, and intangible considerations such as
having the right attitude even for routine but necessary
tasks, or establishing quality personal relationships with
key players such as employees, bankers and lawyers.

The authors' understanding of the personality of the
entrepreneur comes through in their treatment of each topic.
While recognizing that entrepreneurs may vary from doctors,
lawyers, and others who may work alone to inventors and
engineers who may build large companies from their ideas,
Baty and Blake understand that what ties them all together is
the desire for independence, control of their own destiny,
and a good income. The authors understand, too, the
enthusiasm of the entrepreneur for his work, and the
commitment and hopes entailed in entrepreneurship. This
understanding informs the subjects of the book. But the
authors also understand the limitations of the nature of the
entrepreneur, and they deal with these at appropriate points.
The very qualities contributing to an entrepreneur's creation
of a successful business usually work against him when it
comes to day-to-day management and the routine of sustaining
an established business. Thus, the authors also cover how
entrepreneurs can optimally leave their businesses if and
when it becomes necessary.

Baty and Blake note that there is really no apprenticeship
for being an entrepreneur. Working for other companies, even
small, entrepreneurial ones, cannot prepare an individual for
the unforeseen challenges and variety of demands, from
finance, to customer service, to balance between work and
personal life, and the responsibilities for employees and the
reputation of the business. Yet the authors manage to provide
the next best thing to an apprenticeship - namely, this
comprehensive, down-to-earth, readable book, as useful in its
guidance today as when it was first published in 1990.

                           *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA.  Yvonne L.
Metzler, Emi Rose S.R. Parcon, Bernadette C. de Roda, Rizande B.
Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon and Peter A. Chapman, Editors.

Copyright 2004.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.


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